Committee Documents: Standing Committee on Finance and Economic Affairs - 2000-Mar-06 - Pre-Budget Consultations

Pre-Budget Consultations
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Monday 6 March 2000

Pre-budget consultations


Chair / Président
Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)

Vice-Chair / Vice-Président

Mr Doug Galt (Northumberland PC)

Mr Ted Arnott (Waterloo-Wellington PC)
Mr Marcel Beaubien (Lambton-Kent-Middlesex PC)
Mr David Christopherson (Hamilton West / -Ouest ND)
Mr Doug Galt (Northumberland PC)
Mr Monte Kwinter (York Centre / -Centre L)
Mrs Tina R. Molinari (Thornhill PC)
Mr Gerry Phillips (Scarborough-Agincourt L)

Also taking part / Autres participants et participantes

Ms Marilyn Mushinski (Scarborough Centre / -Centre PC)
Mr David Young (Willowdale PC)

Clerk / Greffier

Mr Tom Prins

Staff / Personnel

Ms Elaine Campbell, research officer,
Mr David Rampersad, research officer,
Research and Information Services

The committee met at 1006 in room 228.


The Chair (Mr Marcel Beaubien): Good morning. It's after 10. I'll bring the meeting to order this morning.

First of all, there are a couple of items that I would like to bring to your attention. Under standing order 106(d), the standing committee on finance and economic affairs is empowered to consider and report to the House its observations, opinions and recommendations on the fiscal and economic policies of the province. As a result of this standing order, the committee must table all committee reports before the report can be distributed elsewhere. If a report is distributed before it is tabled in the House, a point of privilege could be raised. Basically, what this stipulates is that even though the committee decides to hold its discussions in an open session, the report remains confidential until it is tabled. That brings us to the next point. What is the wish of the committee? Do we wish to have our discussion in an open session as opposed to a closed session?

Mr Ted Arnott (Waterloo-Wellington): I move that we maintain our open session process.

The Chair: Any discussion on that? If not, all those in favour? That's carried. I would also like to point out to the committee-

Mr Gerry Phillips (Scarborough-Agincourt): Let the media in.

The Chair: Are they banging on the door?

I would also like to make the committee members aware that any changes, when we're dealing with directions to the researchers, are not motions; therefore, they do not need to be voted upon.

With regard to dissenting opinions again, I'd like to have the committee's opinion on this. I'd like to know when we should have dissenting opinions prior to doing the final report. In other words, we need a time frame here. Is it two days after we're done with the report or three days? How do you wish to proceed with this, for any dissenting opinions?

Mr Phillips: Just in case there is one-

Mr David Young (Willowdale): In the unlikely event.

Mr Phillips: I want to cover the bases.

The only challenge for some is that next week is spring break. I don't know whether we've set a time when we wanted to finalize this or not, but if it were possible, my own preference would be not to submit until the Tuesday after the spring break, which would be two weeks from tomorrow. If that's a major problem-the House comes back on April 3, and I guess we wouldn't table this-I guess we send it to the Minister of Finance ahead, don't we?

The Chair: The researcher has pointed out to me, and that's quite correct, that the dissenting report is just added as an appendix to the final report itself. I imagine that if we did receive it within two weeks from now, or from tomorrow, it would be more than adequate.

I'm told that this might slow down the process for translating the report. It's up to the committee; it's not up to me to decide.

Ms Marilyn Mushinski (Scarborough Centre): I take it it's not debated.

The Chair: No. It's just added as an appendix, or just added to the final report. However, the report has to be translated into French.

Mr Arnott: Is there anything in the report of the subcommittee which has given us an absolute deadline?

The Chair: No. We didn't discuss that in the subcommittee at all.

Mr Arnott: If this process is to be meaningful, we want to get the recommendations to the Minister of Finance before he prepares his budget, obviously, and before it's in its final preparation stage. So the sooner we could get it in to the minister, in theory, the better.

The Chair: The House comes back April 3. What is the date two weeks from Tuesday? Does anybody have a calendar?

Mr Arnott: The 21st.

Mr Phillips: The only thing I'd say is that I think there will be revisions in this report that the staff will redo and issue an updated report. It won't be just any dissenting reports. I think each of the committee members will want to review the final report. In the past, I think what's happened is, rather than meet again to deal with it, we've delegated it to the subcommittee to deal with it. One step will be, after we finish our deliberations this week, the staff will go away and write up the final report and then each of the committee members will want to get that and review it. Then we have to confirm the final report as well. I have a suspicion that it's going to be at least next week anyway before the staff finish the report. The final report is prepared, I guess, next week, and any dissenting reports and final comments are done two weeks from tomorrow. I also think, Mr Chair, that you'll want to be in a meeting of the subcommittee to get any final comments on the final report. At least that's what has been done in the past, sometimes by phone.

The Chair: Are you willing to make a motion?

Mr Phillips: Let me suggest to the committee that after the deliberations this week the staff prepare the final report for distribution, hopefully by next Wednesday, and that any dissenting reports and comments on the final report be communicated to the Chair by the close of business two weeks from tomorrow.

The Chair: Which is March 21.

Mr Phillips: If that's what it is, yes.

Mr Arnott: Could I just speak to this point. Gerry. I'm not sure if I fully know what you're getting at, but it would seem to me that the final report would include the recommendations of the committee.

Mr Phillips: Yes.

Mr Arnott: Assuming that we have a unanimous report, there would be unanimous recommendations. If that's not the case, there would be a majority report, representing the majority opinion. Perhaps there will be dissenting opinions from the opposition parties, but that would form part of the body of the final report, would it not?

Mr Phillips: In the past what's happened is there's a final report issued. The dissenting reports are submitted to the Chair, and anybody else who wants them can look at them, but they tend not to be revised after they're submitted.

The Chair: No. After they're submitted, it's my understanding they're strictly an appendix to the final report itself.

Mr Arnott: But they form part of the body of the final report?

The Chair: Yes. It would be attached.

Mr Arnott: My understanding of the process for this week would be to go through the draft report that our research officers prepared, discuss it, see if there are any points of clarification that we feel are required, and at the end of that process we would-

The Chair: You're quite right, Mr Arnott. The only reason I brought it up is that I just wanted to clear the air, to make sure that we had covered as many of the bases as we possibly could. I don't want to hear on Wednesday or whenever we're done with this report, "When do we file the dissenting reports?" I want to put it at home plate right now so that we're clear as to when they have to be submitted, and if there is no disagreement, Mr Phillips has suggested March 21, that the dissenting opinions be filed with the Chair. Is that satisfactory?

Mr Arnott: Then what happens-

The Chair: In the meantime, we're still going to work on the report. Hopefully, we'll have the report done by 2 o'clock today.

Mr Phillips: Ted, I think then it's all finished. By close of business, there is a subcommittee meeting held, maybe by phone, where the Chair says, "Are there any errors in the report?" We can't change the content of the report, but I have a feeling that will be the final version of it, and then, if there is a minority report by the Liberals and the NDP, both of them are submitted for inclusion in the report. That puts the final stamp on it.

The Chair: OK? We'll open the floor for discussion on the draft report.

Mr Arnott: I have a preliminary comment to make. First of all, I want to compliment the research officer on the job he has done putting together a summary of what we heard over the two-and-a-half-week period. There were obviously quite a number of presentations over quite a number of days. He has done a fine job of summarizing them.

There are a number of areas in the report-and I would reference most specifically page 7-where it appears that there was a subjective opinion made by a presenter which is presented as objective fact. I thought it might be helpful to go through the report and indicate where that has taken place; if somebody has expressed an opinion, that the person or group that has expressed that opinion be indicated directly in association with the so-called fact that has been presented. That's just one area. On page 7, in the transportation section, it says, "In the past, too many provincial transportation projects have not taken into account the bigger picture and have allowed extraneous factors to influence their design." I would argue that is a subjective opinion and somebody needs to associate their name with it, whoever made that point at the committee. I was wondering if I could ask, as an overall comment, that that be undertaken.

The Chair: Is that the only general comment you wish to make, Mr Arnott?

Mr Arnott: That's the only general comment, but I have specific comments relating to points as we go through.

The Chair: Discussing this with the researcher, he pointed out that many presenters made subjective comments. Maybe as we go page by page you should raise that particular issue and then we can incorporate that. Is that OK?

Mr Arnott: I could attempt to do that, yes. In some cases, it may very well be fair to say, "Many presenters made this point," but if we don't have some qualification it appears to be an absolute fact, some of us might argue that it's a subjective opinion.

The Chair: Then we can always refer to the back page and classify the comments as to the person in the appendix.

Mr Young: We might want to spend a brief moment addressing whether we want to do it by way of footnotes as to who made the particular comments or whether you want to actually include in the body of the text the name of the individual and the location. I think there should be some clarity as to how you're going to approach this so that it doesn't jump back and forth. There are some instances in here where there is reference to the fact that "submissions were made by" or a comment was made, and there are others where it's simply factual. There should be some uniformity in the way the report reads.

The Chair: We did discuss this at the subcommittee, and I discussed it with the researchers, that we wanted to maintain a brief report. We didn't want a lengthy report. If there is any specific issue where we have to refer to some of the presenters, we could always incorporate a number in the report itself that identifies the presenter at the back, as opposed to saying, "Ten presenters represented the chamber of commerce in Ontario." If it deals specifically with one presenter, I think we can identify the presenter in that manner. I don't think that would be too difficult.


Mr Young: I'd be content with proceeding in that manner. It makes sense.

Mr Arnott: That satisfies the concern I tried to express.

The Chair: Mr Phillips, is that satisfactory?

Mr Phillips: Yes. I just say as notice that there are some things in here that the government states as fact which I don't necessarily agree with as fact, but I think we can take that as given. It states on the first page, "Nearly 50% of the total growth since mid-1995 has been due to increased consumer spending." I would have a different view of that.

The Chair: That was a statement made by the Minister of Finance.

Mr Phillips: I realize that. I accept that they may view that as fact. I don't view it as fact, but I'm not going to want a footnote on all of those things.

The Chair: Do we want to go back and start with page 1 and go through the report page by page? Again, Mr Arnott, do you have any comments? We'll go back and forth.

Mr Arnott: Starting with page 1, in the section entitled "The Economy: Economic Outlook," there is the statement, "GDP for 1999 as a whole was 5% ...." I'd like to see that changed to, "GDP for 1999 as a whole is estimated to be 5%," because I don't think the final numbers are yet in.

The Chair: You're suggesting that the words "is estimated to be" be incorporated.

Mr Arnott: Yes. "GDP for 1999 as a whole is estimated to be 5%."

The Chair: Anything else?

Mr Phillips: I was distracted. What was that? Sorry.

The Chair: On page 1 under "Economic Outlook," Mr Arnott suggested that "GDP for 1999 as a whole was 5%" be changed to "GDP for 1999 as a whole is estimated to be 5%."

Mr Phillips: Good.

Mr David Christopherson (Hamilton West): Chair, sorry for my lateness.

First off, I wanted to thank staff. I'm sure that has been done by others, but I thought they did an excellent job of trying to walk that incredible tightrope that offering up this draft would be. If you think about the reality of what they're dealing with, you can appreciate how difficult it is. I thought they did an excellent job of trying to ensure that it was balanced in terms of all the perspectives that were brought.

I guess it's more a process question than anything. The reality of this is that the government at the end of the day is going to get the report they want. It's that way now, it was that way under our government and it was that way under the Liberals. That's just the way this works. Given that we're dealing with economics, which tends to be a major departure point for us and, I would think, also for the official opposition, I'm just wondering about the fruitfulness of spending time on the draft trying to revise it or find agreement when at the end of the day on virtually every point that matters economically we'll probably have a very strong difference of opinion.

I was going to suggest that we may want to talk about this report in terms of its accuracy, if there's any point that we disagree with from a factual perspective. Then we could have a general discussion. Again I offer this up and I know it's going in the Hansard, but there's not exactly a whole crowd watching what's going on. We're not in the Amethyst Room. I wanted to suggest that at some point fairly soon we might want to recognize that we could recess the committee and allow each of the caucuses to submit their report, make their arguments, take the vote and then we've wrapped it up.

The part of working together was to give people the opportunity to have their hearings. We've done that. I thought you did an excellent job, by the way, even though you and I clashed a couple of times. I just want to say now that I thought you did an outstanding job of being fair to all the parties involved as well as to the public. I think we've achieved that working together about as much as we can, and now the rubber's going to hit the road. I'm just raising for a point of discussion with you-and maybe it would have been wise to have a subcommittee meeting beforehand, I don't know-the reality versus where we seem to be going here and how much time we want to spend arguing something that at the end of the day the government's going to accept or reject, and then we're going to issue our minority reports.

I just offer that up by way of suggesting we need to talk about this and where we're going. We're certainly not going to use up all the time that's there, I wouldn't think.

The Chair: You make a very good point, and we touched on it briefly prior to your being here. Your point is very well taken, that we thought we'd go through the report page by page quickly to make sure we can live, basically, with the information that is in the draft report; that if there are any blatant mistakes or misquotes or whatever, we can deal with them immediately. Then we talked about submitting the dissenting views or dissenting reports, when they have to be filed. Hopefully, it won't take the whole day to do this, as far as I'm concerned, and then each party could submit their own report.

Going through the report, like I said, I mentioned tongue-in-cheek that at 2 o'clock this afternoon we probably should be done, but hopefully we can do it all this morning. That's why we just started to go page by page. As Mr Arnott pointed out, the first issue that he wants to deal with is that as opposed to saying, "As a whole was 5%," it should say, "It is estimated to be 5%," because basically we're just potentially correcting some of the comments that some of the presenters have made. Is that OK?

Mr Christopherson: Yes. Again I would suggest and my opinion is that we don't want to spend a whole lot of time other than factual correctness or not, merely because it's in the record, but once we have the document the government wants, I mean, that's going to be the majority committee position and this will disappear after that.

Mr Arnott: I don't disagree with what you're saying, and I hope we can go through these points relatively quickly. My issues are primarily points of clarification that I want, minor wording changes, that's all. We may be done here before Thursday.

The Chair: That was the first point raised by Mr Arnott. So, any comments?

Mr Arnott: I have a second point relative to that same paragraph. The report says, "It is estimated that GDP growth for the year 2000 could range between 3.7% and 4%." I would like to change that to-again, a point of clarification-"Based on private sector forecasts at the time, it is estimated that GDP growth for the year 2000 could range between 3.7% and 4%."

Mr Christopherson: Is that to suggest that the government disagrees with that in terms of the emphasis of private forecasts?

Mr Arnott: No. I think we established early on that the government did not provide the forecast.

Mr Phillips: They gave us nothing.

Mr Christopherson: I know.


Mr Arnott: We had quite a number of private sector forecasters, though, who gave us their best guess. The government has not indicated what its forecast is going to be for the coming year.

Mr Christopherson: Ah, national security, I suppose? State secret?

The Chair: I can't comment.

Mr Arnott: Going to page 2-

Mr Phillips: I'm sorry, still on page 1, the employment numbers are incorrect.

The Chair: Where is that?

Mr Phillips: Down in the second paragraph from the bottom. I think they've been updated since those numbers. I believe for 1999 it's actually 198,000.

Ms Mushinski: Are you talking about jobs?

Mr Phillips: Pardon me?

Ms Mushinski: Are you talking about the numbers of jobs or unemployment?

Mr Phillips: Yes.

The Chair: But I think these numbers refer to the figure that the Minister of Finance presented to the committee.

Mr Phillips: OK. You'd prefer the 198,000.


Mr Phillips: Well, if you insist.

Mr Arnott: If there are authoritative figures that have been released since-

Mr Phillips: It's just historical revision of the labour force estimates, and that doesn't really matter to me.

Mr Arnott: Is that StatsCan or is it Ministry of Labour?

Mr Phillips: Ministry of Finance.

Mr Arnott: We wouldn't mind the more recent number included in the report.

Ms Mushinski: It's 198,000 new jobs.

The Chair: Anything else on page 1?

Mr Phillips: I disagree with the bottom paragraph.

The Chair: We'll put you on the record. Page 2.

Mr Arnott: In the paragraph that begins with the title "Fiscal Situation," the first sentence there, "For the fifth year, the deficit target will be exceeded, thereby resulting in a balanced budget." We want to clarify that the report should read, "For the fifth year in a row, the deficit target should be exceeded." Ontario is on track to eliminate the deficit in the year 2000-01. This states that "the deficit target will be exceeded, thereby resulting in a balanced budget." It is projected that we will have a balanced budget next year. We hope to achieve it.


Mr Christopherson: Those are ministry figures. I don't have a problem with your doing that, but it should say that those are government figures.

Mr Arnott: Pardon?

Mr Christopherson: I don't have a problem with what you are suggesting. I'm just saying that if you are going to do that, then anything beyond what can be checked factually is projection by somebody, in this case, the government. I would prefer that that sentence reflected that, that's all.

Mr Arnott: Fair enough.

The Chair: Any other comments on page 2?

Mr Arnott: The next paragraph begins with the sentence, "At the same time, expenditure has risen $1.1 billion." We would like to see that changed to "At the same time, expenditure has risen $1.1 billion over the 1999 budget plan."

The Chair: "Over the 1999 budget"?

Mr Arnott: Right. To further clarify what that $1.1 billion has been spent on, we would like to say, "Significant additional expenditures for the third quarter of the fiscal year 1999-2000 include a $200-million increase in public service-OPSEU pension plan expenditure, $196 million for hospitals and $196 million as a result of the Canada-Ontario social housing agreement."

The Chair: Could you read that again, to make sure we have the proper wording.

Mr Arnott: I assumed you could get it from Hansard, but if you can't, I'll read it again.

"At the same time, expenditure has risen $1.1 billion over the 1999 budget plan. Significant additional expenditures for the third quarter of the fiscal year 1999-2000 include a $200-million increase in public service-OPSEU pension plan expenditure, $196 million for hospitals and $196 million as a result of the Canada-Ontario social housing agreement."

The Chair: Thank you.

Mr Christopherson: That change from $196 million for health to $196 million for hospitals, do we have a source for that? Do you have paper on that? It's a political issue.

Mr Arnott: That's my understanding. It is factually correct.

Mr Christopherson: If we could ask David to check it out and it is in the material that was presented and it's just a word clarification, I'm fine with it. But obviously it's a rather sensitive political point, so we want to be sure.

Mr Arnott: You want to check that out.

Mr Christopherson: If you don't mind.

Mr Arnott: Not at all.

Mr Christopherson: So it's agreed, provided David checks it and it is in the documentation that that is what the government is saying the money was spent on.

The Chair: Anything else on page 2, Mr Arnott?

Mr Arnott: Yes. In the middle of the third paragraph of the same section there is a sentence that begins, "At the same time, it should be borne in mind that program expenditures on a per capita basis ...." We want to point out that the Ontario government is spending more on health care in absolute dollars than any other government in the province's history, and that while per capita health expenditures may have dropped slightly since 1995, they have been increasing steadily since 1996-97. So we would prefer that the following wording be used: "While per capita health expenditures may have dropped slightly after 1995, they have been increasing steadily since 1996-97."

Mr Christopherson: I'm sorry, where on page 2 do you want to make the change?

Mr Arnott: The third paragraph of "Fiscal Situation." The bottom paragraph on the page. The sentence in the existing draft report reads, "At the same time, it should be borne in mind that program expenditures on a per capita basis have not declined substantially and, indeed, that expenditure on health has remained constant." We want to clarify that by saying, "While per capita health expenditures dropped slightly after 1995, they have been increasing steadily since 1996-97."

Mr Christopherson: I don't want to use the word "spin," but we're getting close to sort of making an argument about something or taking a fact and trying to show it in a certain light, which is fair game and I expect that to be reflected in the final report.

But if we get into too much of that here, we're having an argument over a draft report that is quite frankly moot after the government's report is tabled. You're making an argument there; you're putting a spin to it.

Mr Arnott: If any spin is being put on it, it makes it more difficult for the government.

Mr Christopherson: Well, eliminate it. Eliminate the sentence.

Mr Arnott: I think the sentence is fine. I just think in fairness and honesty it needs to be clarified.

Mr Christopherson: Well, OK. Let's split hairs. You used the word "slightly." We could argue that we don't agree with the word "slightly." Again, just by virtue of adding that word as part of your description, you're casting a light on it. That's fine for you to do. As I say, I expect you to do it in your report, but to do it here in what is basically a generic summary of what's happened, I have a problem with starting to put words like "slightly" in there.

I really think you're making the argument of what you want in your final report. If that sort of thing is what you want to do throughout this whole document, given that this is just a base reference anyway, I'd just as soon delete it, remove the argument, and move on.

Mr Arnott: I think it's important to point out the level of health expenditure and, as I say, I think this is a point of clarification which is perhaps necessary, given the fact that the way it's written I believe is factually incorrect.

Mr Christopherson: So now we're going to start voting on this report and once we have even one vote, quite frankly, that takes us off of full agreement, it's no longer a document of factual statement. It becomes a political document and this process is moot.

It doesn't mean you can't. I'm just saying it doesn't make it worthwhile putting a lot of effort into the document if you're just going to ram through what you want. That's what your final report is for.

The Chair: At this point in time we're only giving direction to the researcher, so it's not a debatable issue. I would like to see if we can get consensus on it prior to having the final report. There may be voting on the final report.

Mr Christopherson: I'm trying to be helpful, Chair. It won't happen this way.

Ms Mushinski: Why don't we just delete the sentence then if we want to agree in principle?

Mr Phillips: It's easiest for us if the report reflects what people told us. It becomes more difficult if we put things in the report that are editorial comments, just because then I can accept what the government said about the role exports play. But if we start to editorialize, then I have to say: "The government said this. I can't agree with that." Whereas I can accept, yes, that's what the government said. I don't agree with it, but that is a reflection-I'm just saying that if the body of the report can reflect what advice we got, and then our recommendations can be the point of differentiation, that's more helpful for us. Otherwise, as my colleague said, then we're forced to comment on each editorial comment and that becomes more difficult for us.

The Chair: It would make it easier to proceed with, there's no doubt about it, because there are going to be some recommendations that will be forthcoming and you probably can deal with that particular issue at that particular point in time.

Ms Mushinski: Mr Chairman, is Mr Phillips saying that he agrees this is not editorializing and that we've actually changed this sentence to reflect what actually happened to health care expenditures?

Mr Phillips: If you can show me where Mr Eves said it or a government witness said that was the case, that's easier. If we now are putting our own interpretation on it or we're changing what people told us, or adding things to what people told us, then it becomes more difficult for me. If you can show in Hansard that when the ministry was here or his officials were here they said that per capita expenditures were-


Mr Arnott: I don't recall the minister saying that, but I do believe it is the case. I'm surprised that you don't want it included, but if you don't want it included, we can delete the sentence.

The Chair: So just delete it at this point in time? OK.

Mr Arnott: Yes, that last sentence.

Mr Christopherson: That's to get us over this hurdle. Personally I would have liked to see the statement stay, obviously, but to get us past this point-I just want to say, if you've got a whole lot of changes coming that are similar to that and you know it's in front of you, I'm just advising you that deletion is not going to be a solution every way. You'd best think in your mind, are you going to force us to have at least one vote that makes this a political document as opposed to a statement of fact, and not see deletion on other things as how we're going to get past these things?

Mr Arnott: Mr Christopherson, you can vote on any of these if you want. I think it was a reasonable inclusion and if we've just agreed to delete it, we've agreed to delete it, and hopefully we can get on with the next one.

On page 3, on the section entitled "Debt Repayment," the very first sentence states, "Having achieved a balanced budget, the government can turn its attention to repaying the debt."

The budget is not yet balanced, as we heard the Treasurer say. There is still a deficit, I believe in the range of $1 billion in the current fiscal year. It's projected that we will have a balanced budget next year. It's hoped, I think by everybody, that we will have a balanced budget by next year. So if we could change that to, "Once the budget is balanced, the government can turn its attention to repaying the debt."

The Chair: Any comments?

Mr Christopherson: Well, we disagree to the extent that we think there's a legitimate financial argument to be made that the books are already balanced. But given where the sentence goes anyway-

Mr Arnott: Thank you. Later on in that same paragraph, about the middle of it, there is a sentence that begins, "The government's proposal to reduce the debt by $2 billion per annum during its current mandate is regarded by some as too modest."

The government has never stated that it's going to reduce the debt by $2 billion per annum, but our party committed to reducing the debt by $2 billion over the term of government should we be re-elected. That was a statement in our Blueprint document. We need to state that it's a $2-billion repayment of the debt over the current mandate.

Mr Phillips: That's right.

The Chair: That's a fact. We were talking $500 million a year.

Mr Arnott: Actually, $500 million isn't correct either.

The Chair: No, but during the discussion there was reference made to that.

Mr Arnott: Yes.

Still on page 3, in the section "Taxes," the second paragraph in that section begins, "On the other hand, it was pointed out that because the tax cuts took effect when the budget was not balanced, they constituted borrowing and therefore contributed to the growth in the debt by more than $3 billion."

The government would argue that this statement was made by witnesses and should be attributed to them. The report should read, "On the other hand, other witnesses argued that because the tax cuts took effect when the budget was not balanced, they constituted borrowing," and so on.

Mr Young: That's in accordance with what we talked about before.

Mr Arnott: Exactly.

Mr Young: Quite simply, I have it in my notes here attributing it to individuals who made submissions.

The Chair: You're balancing it by coming back, "On the hand, other witnesses"-

Mr Arnott: Right.

In that same paragraph, the very next sentence from the draft report reads, "Moreover, they jeopardize the provision of social services that have traditionally been provided by government and they benefit the `rich' at the expense of the rest of society." Again we would state that was a statement made by witnesses and should be attributed to them. A neat way of wording it would be, "They further argued that these cuts jeopardize the provision of social services."

Mr Monte Kwinter (York Centre): Mr Chair, may I make a suggestion?

The Chair: Sure.

Mr Kwinter: I have no problem with the intent but I would rather change the word from "they" to "it." When you say "they," it gives the impression that the people who made the comment before are the same people who are making this one, and they may not have been. There may be two different groups.

Mr Arnott: So you'd just say, "It was further argued."

Mr Kwinter: "It was further argued," as opposed to, "They further argued," which implies that the same people said that.

Mr Arnott: It may not the case. OK.

Mr Kwinter: It may not be the case.

The Chair: Any further comments?

Mr Arnott: Same paragraph, last sentence. The wording here is, "It was proposed that the remaining tax cuts be cancelled and that the revenue be assigned," and you could again say, "Some witnesses proposed that the remaining tax cuts," but the same kind of idea, making sure it's attributed to the witnesses and directly so.

In the next paragraph, entitled "Personal Income Taxes," it reads, "Personal income taxes have already been reduced by 30% and will be reduced by another 20% over the next five years." We want to make sure that the wording is factually correct, so we would suggest that the wording read instead, "Ontario's general personal income tax rate has already been reduced by 30% and will be reduced by another 20% over the next five years."

The last sentence in that same paragraph reads, "Approximately 1,205,000 citizens have benefited.... I would prefer that it states those facts this way: "Approximately 1,205,000 citizens benefit from the Ontario tax reduction program, including 650,000 who pay federal PIT but not provincial PIT." That's a point of clarification.

Mr Arnott: On page 4, the very first sentence, top paragraph, it reads, "The marginal tax rates in Ontario are regarded by several witnesses as a cause for concern." The government believes that the witnesses who commented on this expressed concern about the high top marginal rates, not marginal rates in general. We would prefer that it read, "The high top marginal rates in Ontario are regarded by several witnesses...."

Mr Christopherson: Just a clarification for you, Chair: Marginal rates only apply to the high-end income earners anyway, so what's the distinction?

Mr Arnott: It's my understanding that the marginal tax rate is the rate of tax on every additional dollar that you earn, right?

Mr Christopherson: Yes.

Mr Arnott: So what we're trying to talk about here, I think, what the witnesses were trying to talk about, is the high top marginal rates, not necessarily marginal rates in general.

Mr Christopherson: Sorry, the emphasis being on? They only apply to high-income earners. Did you say "high rates"?

Mr Arnott: No. My understanding is, when you talk about marginal tax rates, that you're not necessarily talking about the highest rate of income tax. You're talking about the amount of tax that you pay on the next dollar you earn above and beyond what you're earning today.


Mr Christopherson: You're saying all the thresholds along the way. Sorry. Again, I don't want to split hairs, but I'm trying to understand your point. You're moving into a different threshold tax bracket as your income increases. I agree that's not high income, but I don't think that qualifies necessarily as marginal rates, does it? Again, not being an economist, maybe they used every one of those thresholds as a marginal rate.

Mr Arnott: I think that's what they talk about. That's my understanding.

Mr Christopherson: So anything from dollar one that's taxed is a marginal rate?

Mr Arnott: We've got the economists over here who want to jump in, I think. It's my understanding that the concept of marginal rate of taxation is the marginal rate is the amount that you pay on the next dollar that you earn above and beyond what you're currently earning. So you can talk about high marginal rates. High marginal rate is the top rate, I believe, of tax that you pay.

Mr Christopherson: I guess I was just trying to get a sense of when you say "high top rate," do you mean the high-income earner or the rate that the marginal tax is at is too high?

Mr Arnott: I'm trying to remember how many tax rates are applied to income in the country. I think there are three. We're talking about the high marginal rate.

Mr Christopherson: The highest?

Mr Arnott: It could be the highest, yes. The presenters who expressed concerns about tax rates talked about the high marginal rates.

Mr Kwinter: If you take a look at that paragraph, I think they're trying to compare that in Ontario the marginal tax rate is applied at the income level of $63,000. In other words, up to $63,000 there is a formula for the taxes you pay on a percentage. Once you get above that, there's a marginal rate. Comparing that with the United States, the marginal rate does not kick in until $400,000.

Mr Arnott: The high top marginal rate, right?

Mr Kwinter: It seems to be the point that's being made in this paragraph. Their concern is that $63,000 is a number that should be increased. So they're concerned that the marginal rate kicks in at $63,000.

Mr Arnott: The high top marginal rate.

Mr Kwinter: That's the concern that they're expressing. Otherwise, why would they be comparing it to the $400,000 in the United States?

Mr Arnott: The very next sentence, following up on what Monte was saying, is, "Although middle-class earners pay the lowest rate of ... personal income taxes in the country, they are penalized by the marginal tax rates which are applied at the income level of $63,000." We would prefer it say, "they are penalized when the top marginal tax rate begins to apply at an income level of $63,000."

Mr Christopherson: Is that to say tax paid below that is still a marginal tax?

Mr Arnott: Can you ask the question again? I'm trying to understand what you mean.

Mr Christopherson: Again, you're insisting on this high rate, and we're at this point where marginal taxes only kick in when you've got high income.

Mr Arnott: No, I don't think that's correct. As you go up the income scale in a graduated income tax system, if there are three categories of tax or three classes or three rates that are applied in a graduated system, as you go up, you're hitting marginal rates. But the high top marginal rate is the high rate. It kicks in at $63,000 of income. Some of our presenters indicated the belief that the high top marginal rate should kick in at a higher level of income.

Mr Christopherson: Your exact wording was what?

Mr Arnott: Very consistent, I think, with what I heard Monte expressing: "they are penalized when the top marginal tax rate begins to apply at an income level of $63,000," instead of, "Although middle-class earners pay the lowest rate of provincial personal income tax in the country, they are penalized by the marginal tax rates which are applied at the income level of $63,000." We want the wording "top marginal rate," because I think that's technically correct.

In the next section the heading is "`Made for Ontario' Tax System," and the second sentence there reads at present, "Among other things, the province is unable to influence decisions regarding its own Income Tax Act or introduce policy measures without federal concurrence." We would prefer that it say there, "Among other things, the province is unable to introduce policy measures, other than rate changes, without federal concurrence."

The Chair: Any comments? If not, go ahead, Mr Arnott.

Mr Arnott: I'm afraid I have to go back to the first paragraph with a further suggestion, again consistent with what we've talked about in terms of adding the words, "top marginal rate" to that sentence: "It was suggested that they be reduced to maintain Ontario's competitiveness with the United States"-it says here "marginal," but we want to say, "where the top marginal tax rate begins to apply at an annual income level of $400,000."

The Chair: So you want "top marginal" wherever "marginal" appears?

Mr Arnott: That's right. Again, consistent with what we have already established.

In the middle of the page, in the section "`Made for Ontario' Tax System," the very first sentence in that second paragraph is, "The `Made for Ontario' personal tax system should be seen within the broader structure of federal-provincial relations." We would like to see that changed to, "The Minister of Finance stated that the `Made for Ontario' personal tax system should be seen within the broader structure of federal-provincial relations," again clarifying that it was the opinion of the minister as expressed to the committee.

The Chair: Basically all you're introducing there is "The Minister of Finance stated"?

Mr Arnott: "The Minister of Finance stated," yes.

The Chair: Any comments? Go ahead.

Mr Arnott: In the next part, the paragraph that is entitled "Corporate Taxes," getting down to the bottom of the page there, there's a sentence on the very last line that begins, "It was suggested that the Business Advisory Panel on Corporate Taxation proposed in the 1999 budget should be established and that its recommendations be implemented as soon as possible." We just want to characterize the committee the way the government has been talking about it, as the Business Tax Review Panel. That's its official name, not the Business Advisory Panel on Corporate Taxation. Again, we would call it the Business Tax Review Panel.

The Chair: Comments? No.

Mr Arnott: On page 5, the paragraph on payroll taxes, the very last sentence of that paragraph reads, "Ontario has reduced the employer health tax for all businesses and for self-employed individuals and businesses with payrolls under $400,000." For the purposes of clarification, we would prefer that it read, "Ontario has reduced the employer health tax for all businesses and eliminated it altogether for self-employed individuals and businesses with payrolls under $400,000." Just a point of clarification.

The Chair: Comments?

Mr Kwinter: I have no problem with it. I just would change the wording and not say "eliminated it altogether," but "totally eliminated it."

Mr Arnott: " ... for self-employed individuals ... "

Mr Kwinter: Yes, "totally eliminated it for self-employed individuals and businesses ... "

Mr Arnott: " ... and businesses with payrolls under $400,000."


Mr Kwinter: I'm a former editorial director, and I just don't like "eliminated it altogether."


The Chair: Is that acceptable?

Mr Arnott: Yes.

The Chair: Go ahead.

Mr Arnott: The next paragraph, "GST-PST Harmonization," the second sentence there-and I guess this is maybe an example of what I talked about in my preliminary comments: "The current system, whereby the GST is attached to the PST, creates regressive compliance costs for small business. It reduces the competitiveness of Ontario's businesses vis-à-vis competitors from jurisdictions that have harmonized sales taxes. A national harmonized system is desirable since, among other things, it would lead to a lower rate of taxation."

We would like it to be indicated as follows: "These witnesses argued that the current system, which has two separate sales tax administrations, creates regressive compliance costs and reduces the competitiveness..." Make sure it's attributed to the witnesses as opposed to a statement of fact that's not disputed.

The Chair: Go ahead.

Mr Arnott: Under the section "Gas Taxes," the very first sentence we have here is, "The impact of rising and volatile gas prices on the cost of transporting goods is adding to business costs, a problem that is compounded by high fuel taxes." I guess from our perspective as government members we'd want to point out that the provincial gasoline tax, at 14.7 cents a litre, has remained frozen since 1992-

Mr Christopherson: Oh, come on, Ted.

Mr Arnott: -and that that is not the root of the current problem with rising gasoline prices, given the fact that our tax has not gone up since 1992.

Mr Kwinter: Can I address that? I do think we're getting into a problem area when you start doing that. There's no question that when we were hearing deputants, they were concerned about the high tax component of it. I don't think we should be arguing that in this paragraph. There's ample opportunity to make the government's argument in your recommendations, but I think you're really changing what was said and what was said to us. There's no question that you see the Canadian Automobile Association-several groups made representations to us about the price component of the tax, and I think you can't argue it in this point. There's a place for you to make the argument, but I don't think it should be argued in this paragraph.

Mr Christopherson: Exactly my concerns.

The Chair: This is something that maybe could be introduced in your appendix.

Mr Arnott: It could be, but nevertheless it is a fact that provincial gasoline taxes-

Mr Christopherson: So what? The sun came up this morning in fact too.

Mr Arnott: Yes, it did. Provincial gasoline taxes haven't gone up since 1992, so I don't know how anyone could argue that that's-

Ms Mushinski: Why are you so defensive?

Mr Kwinter: Because it's well known.

Mr Arnott: -the root cause of the volatility, the gasoline tax today.

Mr Christopherson: Because it's an argument and it reflects the recent political position that the Premier came up with, which he's entitled to do. I'm not even arguing that it's not true, but that's not the point. That point was never made anywhere by anyone in the presentations we heard and therefore is editorial, political, and not a reflection of what we heard.

Mr Kwinter: That's the point. No one came to us and said, "Whatever you do, don't touch the tax component because it's never gone up." No one has said that. I'm not in any way arguing that the tax should be changed. I'm just saying that is not what was presented and it's really editorializing and responding to something where there's a place to do it.

Mr Arnott: I don't recall anyone making that case either. Certainly if you're concerned about high gas taxes, it's a fair thing to say to the provincial government, "Are you prepared to cut gas taxes?"

All I'm saying is, it's a point that we think could be included in the report as a fact.

Mr Christopherson: And we're saying no.

Mr Kwinter: No, no. We're saying there is a place to do it.

Mr Christopherson: You admit no one said it, and all we're doing is on the basis of what we heard. How can you say the two fit? You just think it's a keen argument, and that's fine. Show it in your final report-

Mr Arnott: Granted it's a helpful argument.

Mr Christopherson: -but not as a reflection of what we heard when we didn't hear it.

The Chair: To be fair, what I'll do is ask the researcher to look at the presentations from the presenters. If the 14.7 cents per litre was referred to, then fine; if not, I think maybe it's something which should be incorporated in the appendix.

Mr Arnott: Fair enough. I still think it's a valid point, but we can review Hansard. I don't recall anybody making that point.

Mr Kwinter: If I could just add one other comment. This issue has been around for as long as I have been around. I was the Minister of Consumer and Commercial Relations, and I had to fight this issue. What happens is: You can have all of your fact-finding groups and gas-busters and everything else, but nobody is going to be able to say to the oil companies, "We are going to impose a limit on what you can charge." It's just not going to happen. So when you get into the argument, the only way the province-unless they want to really get draconian and say, "We're putting a cap on the price of fuel." That is really intruding in the marketplace. How do you tell someone, "You must sell gas and lose money."

The only area where the province has any flexibility is in the tax. One thing they can do without asking anybody is say: "We understand that this is a real hardship on drivers. We're going to cut the tax it in half, or we're going to do whatever." That is a valid thing and the only they can do. They have no ability to do anything else, other than make noise and appear to be doing something. In the final analysis, there have been eight inquiries that I know of, and they all come up with the same determination. That is why I am saying the argument-and I'm not making the argument-has to be made in a different place. Nobody came up to us and said, "Leave the tax alone, but do something else."

Mr Arnott: Okay. That's fine. Again, perhaps we could include this in our final recommendations, but I believe it is a valid point and would think there is a place for it in the report.

Mr Christopherson: It's not a valid point.

Mr Arnott: On page 6, "Property Taxes," the first two sentences: "The seeming inability of governments to create an equitable system of property taxes concerned many witnesses. The introduction of the province-wide assessment system based on current or market value in 1998 included, among other things, `ranges of fairness' that spelt out the extent to which taxes on commercial, industrial and multi-residential property could differ." The point we would like to see reflected here is that the Ontario fair assessment system provides a fairer property tax system by updating all property assessments and providing municipalities with tools to establish fair property taxes and mitigate tax changes. The new system is more transparent and taxpayers know what they are paying compared to others.

Mr Christopherson: I'm sure you'd love to have that in there. Who said it?

Mr Phillips: Besides you?

Mr Christopherson: Yes, besides Ted just now.

Mr Arnott: I've heard it stated in the Legislature many times.

Ms Mushinski: Where did "The seeming inability of governments to create an equitable system of property taxes concerned many witnesses" come from?

Mr Christopherson: I don't have a problem with that.

Mr Young: Can you delete that initial line, the line that you wanted commented upon?

The Chair: What are you suggesting?

Mr Young: Nothing yet.

Mr Arnott: Again, it's fair to make this point of clarification as to what was motivating the government in terms of its changes to property tax.

Mr Christopherson: If somebody wanted to make a clarification as to who said it, or if it was factually incorrect, reflecting what someone said, fair game. Again, I think the government is looking for words and editorial comments that weren't made. And again, they can put it in the final report, but not as a statement of factual-

Mr Kwinter: Can I make a suggestion that might solve the problem. I want to be fair, and I think that that is a pejorative sentence, I really do. It would seem to me that a way of getting around it that will serve everybody's interests is to say that some witnesses expressed concern about what was supposed to be an equitable system of property taxes.


Mr Christopherson: That makes the government look better.

Mr Kwinter: In other words, the sentence now says the government hasn't got the ability to deal with this.

Ms Mushinski: That's right.

Mr Kwinter: It is saying that this is supposed to be fair, but there are instances where obviously it is not fair, and that was their concern. I think that is what we should be conveying. If it were a perfect system, this wouldn't be in here.

Mr Arnott: In terms of wording, I would prefer it to say that it's the government's intention or the government intends.

Mr Kwinter: This isn't a statement from the government; this is a statement from witnesses who are expressing their concern about what they see is an inequitable implementation of this fair tax system. We heard it. They're saying there are all sorts of inequities in there and lots of problems that haven't been addressed, in their view. This is just their view. You may not agree with it, but that's what they are saying.

Mr Young: What are you suggesting?

Ms Mushinski: "Some witnesses expressed concern about the government's ability to create an equitable system of property taxes"?

Mr Kwinter: The point they were making was that some witnesses expressed concern about what was supposed to be an equitable system of property taxes.

Mr Arnott: I can accept that if you were to say, "The government intends to create" as opposed to what was supposed-

Ms Mushinski: "The government's intention to create"-

Mr Kwinter: We're not saying what the government said; we're saying what the witnesses said. You have a chance to respond to that later on in the same way. Then they go on to say why they say this is their point, and this is what we have to address.

Mr Young: What about as a compromise saying "had some concerns about what was tabled as" or "presented as"?

Mr Arnott: That's fine with me.

Mr Young: Does that satisfy both sides of the argument?

Mr Kwinter: Again, they weren't there, and they weren't criticizing material that had been tabled. They were criticizing what was actually happening out in the real world. They were saying: "Here we are. We got our tax bills. This was supposed to be fair, it was supposed to be equitable, and here are all sorts of cases where that isn't the case." All they're really saying is-and, as I say, it is pejorative to say "the seeming inability of governments to create an equitable system of property taxes." I really don't think it's fair to say that. But on the other hand you have to acknowledge that there are problems in the system, and the people who came were pointing out those problems.

Mr Young: Monte, you proposed-and I know you were just thinking out loud-and talked about using the words "about what was supposed to be."

Ms Mushinski: It's a hell of a lot fairer than it was.

Mr Kwinter: Fine, and I'm not saying that. What it was supposed to be was totally fair, and they're saying there are problems with it and they want it addressed. I don't think anybody can object to that. All they're saying is that there was supposed to be an equitable tax system and yet there are all these anomalies that keep coming up where it isn't. They're just saying, "Do something about it."

Mr Arnott: What was your wording again, David?

Mr Young: Something along the lines of "presented as" or "tabled as."

What if we took a different approach and said something like, "Some witnesses expressed concerns about the manner in which recent changes to property taxes have affected them."

Mr Arnott: Sounds good.

Mr Kwinter: I think it's critical that we maintain that the intent of this legislation was to provide an equitable system of property taxes, and some witnesses were concerned that that in fact is not the case.

Mr Christopherson: If we can't agree on it, the easiest way is that we take that sentence out. It doesn't really do anything. It doesn't take away from what the paragraph says, and may remove the language you are not comfortable with.

Mr Young: So the paragraph would begin, "The introduction of the province-wide assessment system ...."

Mr Christopherson: Again, thinking out loud, that's what I'm suggesting.

Mr Arnott: Yes, if we can remove that first sentence, that would be satisfactory, I guess. Getting into that, if that second sentence now becomes the first sentence, having deleted the first sentence of the draft-

Mr Christopherson: That is the reference to witnesses.

Mr Arnott: Yes. It says, "The introduction of the province-wide assessment system based on current or market value in 1998 included, among other things, `ranges of fairness' that spelt out the extent to which taxes on commercial, industrial and multi-residential property could differ."

It would be my recommendation that we change that first sentence to, "The introduction of the province-wide assessment system based on current or market value in 1998 included, among other things, `ranges of fairness' that spelt out the extent to which taxes should differ between property classes."

Ms Mushinski: Is that "should"?

Mr Arnott: Yes, "should."

Mr Kwinter: Again, if you want to do that part of it, I would eliminate the first sentence and just say that some-whatever you want to call them-"Some witnesses were concerned that the introduction of ... could differ."

Mr Arnott: That's fine, except that I'm suggesting that towards the end of that sentence, instead of "that spelt out the extent to which taxes on commercial, industrial and multi-residential properties could differ," it should say "that spelt out the extent to which taxes should differ between property classes."

Mr Kwinter: No, that's not their concern. They're not saying you should differentiate. They're saying: "The guy down the street has got the same value as I have, the same house as I have, and we have different assessments and different values. They differ." That's their concern.

Mr Arnott: That's where we've got a problem then. That whole sentence is attempting to be a statement of fact of the reality of the system that the government was trying to set up.

Mr Kwinter: That's why I am suggesting that if you started off to say, "Some witnesses"-

Mr Arnott: Some witnesses are concerned about it.

Mr Kwinter: -"state that this statement of fact could differ." It's supposed to mean that there's fairness and there's a range and they're saying that this range could differ, depending on the particular property.

Mr Arnott: Could we get around that by creating a new first sentence, saying very simply, "Some witnesses came before the committee expressing concern about the property tax reforms in the province of Ontario?"

Mr Christopherson: I think Monte's point is well taken, that the "could" or "should" does shift the emphasis that the witnesses were placing in terms of the point they were making. Do you know what I mean? As opposed to your looking at it in terms of how would you phrase what it is you want to accomplish, Monte's point is well taken that the witnesses were pointing out that there could be these differences and they shouldn't be there. That emphasis on "could"-I don't want to spend too much time on one word; next thing we're debating the word "so"-I think his point is very well taken, whether making that shift that you want really alters things as opposed to clarifying it.

Mr Arnott: If you start the sentence with, again what words, Monte?

Mr Kwinter: "Some witnesses were concerned that the introduction of the province-wide assessment system based on current or market value in 1998 included, among other things, `ranges of fairness' that spelt out the extent to which taxes on a commercial, industrial and multi-residential property could differ."

Mr Young: What happened to your editorial board background? That's a long sentence.

Mr Kwinter: No. I'm just trying to get the intent of the thing. We're not going to rewrite the whole paragraph. I just want to take a look at that sentence.

Mr Christopherson: Could we hear it again?

Mr Kwinter: That was the intent-

Mr Christopherson: Adding "Some witnesses" in front of that. Eliminate the first sentence and then start the second as the first with "Some witnesses." I think it should be "Many witnesses," because that's the description-

Mr Young: There has to be another word.

Mr Christopherson: Other than that, it's the same.

Mr Arnott: "Some witnesses" what?

Mr Kwinter: " ... were concerned that .... "

Mr Christopherson: Yes, and everything else runs the same as the draft.

The Chair: Have we got consensus on this here? "Some witnesses were concerned that ...."

Mr Arnott: Thanks, Monte.

The Chair: OK.

Mr Kwinter: OK.


Mr Arnott: Towards the end of that paragraph, the last sentence in that same paragraph, it says, "Moreover, while the 10-5-5 cap has prevented the imposition of tax increases for some businesses, it has allowed a number of municipalities to postpone decisions on this complex issue." I would point out the provincial government has undertaken the difficult task of reforming an outdated property tax system in recent months. Many municipalities chose not to use the available tools to manage tax changes resulting from moving to a fairer system. The result was that too many businesses would have experienced severe and unmanageable tax increases, and this is why the government stepped in to impose the 10, 5 and 5 limits on property tax increases.

Municipalities are required to limit tax increases related to property tax reform on commercial-industrial-multi-residential properties to 10% in 1998, 5% in 1999 and 5% in the year 2000. For municipalities which adopted the 10, 5 and 5 cap, they were required to recalculate the 1998 taxes, redistributing taxes closer to the way they had been distributed in the previous year. This means that property owners whose taxes were increasing in 1998 would see less of an increase than they would have faced, and taxpayers whose taxes were decreasing in 1998 would see less of a decrease than they had anticipated.

Mr Christopherson: Is this a reflection of what was said, or is this a creative writing course?

Mr Arnott: This is something we would like to see-

Mr Christopherson: I'm sure you would.

Mr Arnott: -included in the body of the report because it accurately I think clarifies the government's position, which would be of assistance to people reading the report.

Mr Christopherson: Ted, sorry. There's no way we're going to go that far off the thing. I will say, however, if it's helpful to you, that "allowed a number of municipalities" is a pejorative statement against municipalities. Maybe the word "allowed" changed to "resulted in" is fair, and then do not suggest why they did it. "Allowed" almost sounds like the municipalities were pulling a fast one. So "resulted in" I think is fairer in terms of what the end result is. Other than that, you're asking for an entire change which, again, dropped into your report is fine, but you really do alter what was said at the committee.

Mr Arnott: So again, Dave, you're suggesting that the word "allowed"-

Mr Christopherson: I was just suggesting that where it says "allowed" in the second-to-last sentence of "Property Taxes," first paragraph, we change that to "resulted in a number of municipalities postponing decisions on this complex issue." That's factually correct and that's what was pointed out. When you say "allowed," you're suggesting that councils were deviously trying to manipulate, and I don't know that we want to say that about all municipalities. I would hope we wouldn't want to say that. But the rest of it, I think you're asking for a bit much from a factual document. I don't know how those will stand up.

Mr Arnott: I don't object to changing "allowed" to "resulted in." I think that's a helpful suggestion. Thank you.

The Chair: In order to move this thing on property taxes along, correct me if I'm wrong, but I think what we've heard is that there were some ranges of fairness, bands of assessment. However, some municipalities decided not to use those tools. It created a problem, and I think with a report to the Minister of Finance the presenters wanted to make us aware that it created a problem. Consequently, this is what we should be reporting to the ministry, that those tools were not used within the act itself. Am I correct or am I wrong?

Mr Christopherson: I don't know that you can limit all their concerns to just those two things.

The Chair: I'm just referring to those two items, but generally speaking.

Mr Christopherson: But look at what we have. The sentence says right now, "Moreover, while the 10-5-5 cap has prevented the imposition of tax increases for some businesses, it has resulted in a number of municipalities postponing decisions on this complex issue." I'm sorry, what more are you suggesting we need to make the point?

The Chair: I'm not suggesting anything. I think we're trying to make it too complex.

Mr Arnott: That could be, Mr Chair.

The Chair: I think the word you suggested, "resulted," is adequate. That's the clarification you were looking at.

Mr Arnott: That's fine. Ideally, we'd like to see more clarification on education tax rates and we'd like to see some reference to the fact that there is a new appeal process underway as part of the property tax reform. The appeal process has been streamlined and there is a new consultation process.

Mr Kwinter: You'll get a chance to use all that good stuff in your response.

Mr Arnott: We think that the report would be improved if all of that was included.

Getting down to the section on the SuperBuild Growth Corp, page 6, the very last line on page 6-

The Chair: Excuse me, Mr Arnott, for the purpose of the record, could you repeat the clarification. We're just changing the word "allow" to "resulted"?

Mr Arnott: Fair enough.

Mr Kwinter: And also postponing-"resulted in a number of municipalities postponing decisions."

The Chair: Thank you. Go ahead.

Mr Arnott: Going back to the last paragraph on page 6, the reference to the SuperBuild Growth Corp: The sentence there reads, "For the first fiscal year of the program, the government has allocated $2.9 billion, the bulk of which will be devoted to highways ($936 million), education ($742 million) and health ($504 million)."

In fact, the words "post-secondary" should appear before the word "education," because all that money is going to post-secondary institutions; none of it is going to school boards.

The Chair: Comments?

Mr Arnott: Earlier in that paragraph there is a statement that reads, "Those proposed partnerships are the key to leveraging government's initial investment of $10 billion over five years to attract matching private sector investment." We want to change the wording there to, "The proposed partnerships are the key to leveraging the government's initial investment of $10 billion over five years to attract additional investment from private sector and other non-governmental partners."

Mr Christopherson: Why not the word "matching"? Isn't it $20 billion over five and you're going to provide $10 billion and you want players elsewhere to provide another $10 billion? So the word "matching" is still accurate, I believe, isn't it?

Mr Arnott: Yes.

Mr Christopherson: If you agree with that, then you're just suggesting that it may not be only private sector, it could be-what were your words?

Mr Arnott: "Other non-governmental partners." The word "additional" is in there because it is $10 billion of government investment and $10 billion in addition.

Mr Christopherson: But "matching" said that. "Matching" is actually better because rather than just leaving the impression that it's $10 billion plus something, you're actually doubling it. So "matching" it would seem to me is in your favour, but if you want to say "additional," that's up to you. I'm just trying to help you a bit.

Mr Arnott: I appreciate it.

Mr Christopherson: That's why I came here today.

Mr Arnott: Thank you. That's fine, but I think it is important to point out that the additional $10-billion investment will include other non-governmental partners, for example, the post-secondary institutions that received SuperBuild Growth money last week or two weeks ago.

The Chair: Are we staying with "matching"?

Mr Arnott: Sure. It accomplishes what I'm trying to suggest we need to do.

Mr Christopherson: So all you're adding is the "non-governmental" sources?

Mr Arnott: "And other non-governmental partners."

Mr Christopherson: That's fine.

Mr Arnott: On page 7 there is a section on the Red Tape Commission. The second sentence of that paragraph in the draft report reads, "It was pointed"-"It was pointed out," I guess it's supposed to say. "It was pointed out that since its institution, the commission has been responsible for the introduction of 11 bills that have repealed 28 statutes and amended 149 others. Moreover, approximately 1,300 pieces of outdated legislation have been revoked." Again for clarification we would prefer that it read: "Between 1995 and 1999 the commission has been responsible for the passage of 11 red tape reduction bills that have repealed 28 statutes and amended more than 150 others. Moreover, more than 1,300 outdated regulations have been revoked."


Mr Christopherson: So it's just "regulations" that you're changing?

Mr Arnott: No. We're saying: "Between 1995 and 1999," which of course is concurrent with our first term in government, "the commission has been responsible for the passage of 11 red tape reduction bills that have repealed 28 statutes and amended more than 150 others. Moreover, more than 1,300 outdated regulations have been revoked." So the first point is clarification, and the second point is correction.

Mr Christopherson: Yes. A couple of things: First, I don't have a problem with 150 if that is the more accurate figure, but I would ask that it be checked so it's confirmed on paper. Second, even in the draft I'm not thrilled with the words "outdated regulations." In many of those regulation changes there were differences in the House as to whether they were important and outdated. Certainly we agreed that some were outdated, and we didn't have a problem with that and I made that comment in every single speech on red tape bills that I made in the House. However, there is a significant difference of opinion on a great number of them, and I would have trouble standing behind a statement in this document that gives the word "outdated" to describe all those regulation changes. That is very difficult for me.

Mr Arnott: Could we say, "1,300 regulations that the commission recommended were outdated"?

Mr Christopherson: If you put "the government considered outdated", that would be absolutely fine with me. When we collectively are trying to find a document we can agree on and you make the statement that they are outdated, I and my party don't believe all those regulations were outdated.

Mr Arnott: OK. It's just that they were identified by the commission; so if we could find some wording that captured that.

Mr Christopherson: If you said "the commission considered," I don't care.

Mr Kwinter: Could I suggest that we just take out the word "outdated" and do nothing else: "1,300 pieces of legislation have been revoked," period.

Mr Arnott: It's actually 1,300 regulations. Unfortunately it's a mistake.

Mr Kwinter: Whatever it is: "1,300 regulations have been revoked," period. You don't have to say what they were. They're outdated only in the sense that the Red Tape Commission says they were outdated and should be revoked.

Ms Mushinski: Except if the witnesses referred to them as being outdated.

Mr Christopherson: Then you would have to say the witnesses said that.

Ms Mushinski: It starts by saying, "A number of witnesses from the business community praised the work of the Red Tape Commission."

Mr Christopherson: Earlier you made the argument, on a number of paragraphs, that you wanted it very clear in those paragraphs. I just want to apply now the same excellent thinking you were using then.

Ms Mushinski: I couldn't agree with you more.

Mr Kwinter: The point is that when you take a look at the first sentence and say, "A number of witnesses from the business community praised the work of the red tape commission for ensuring the streamlining of the regulatory burden," that doesn't necessarily mean they were outdated. They may have been very dated; it's just that three or four of them were duplicated, so something was done about them. As long as you say that 1,300 regulations have been revoked, it's a fact that 1,300 regulation were revoked. You don't have to go on to say that some of them were outdated, some of them were consolidated or whatever. It just gives the factual information that 1,300 regulations have been revoked.

The Chair: Could we get consensus on that?

Mr Arnott: We could argue that the commission determined that they were unnecessary and the government agreed. I think the government believes they were outdated.

Mr Christopherson: I'm fine either way. I just don't want to take ownership of the descriptive word "outdated," because I don't agree with it.

Mr Arnott: I understand that. For my part, I would prefer that the word "outdated" remain in there.

Ms Mushinski: Yes. The commission did it for a reason, and the reasons were primarily that they were unnecessary or outdated.

Mr Christopherson: Public input on changes to the environment are no longer considered dated by this government. We have a different opinion. If not to get into that world is what we're trying to achieve, I can live with either attributing it to the commission's belief or Monte's, which is to withdraw it. Either way-

Mr Arnott: My understanding of the process that was followed was that the commission made those recommendations and the government agreed with them and responded with the elimination of certain outdated regulations. So if we could capture that wording, I would be happy about it.


The Chair: If we give credit to the commission-

Mr Christopherson: Or blame.

The Chair: -and then, "1,300 pieces of regulation have been revoked." Legislation.


Mr Kwinter: Regulations.

Mr Christopherson: Are you moving off that paragraph?

The Chair: Go ahead.

Mr Christopherson: I was just unclear when I read it through about the last sentence, "There was consensus that the commission be made permanent." Consensus among whom?

Mr Arnott: Good point.

Mr Christopherson: Us? Presenters?

Mr Arnott: I think the government members would agree that the commission ought to be made permanent, but I'm not sure about you guys.

Mr Christopherson: The commission members?

Ms Mushinski: I'm not sure because I wasn't sitting on the committee at the time.

Mrs Tina R. Molinari (Thornhill): Consensus among the witnesses.

Mr Arnott: You could say among the witnesses who talked about the Red Tape Commission. Many of them agreed that it should be made permanent.

Mr Christopherson: I'm sorry, but I would want to see then just a qualifier to the extent of "witnesses who made reference to the commission's work...."

Mr Arnott: Fair enough.

Ms Mushinski: That's what the section starts off with.

The Chair: That's fair.

Mr Arnott: On the next page, looking at the section entitled "Agriculture," about halfway through that first paragraph there's a sentence that begins with the following: "The reduction of government support, from $453 million in 1991-92 to $296 million in 1998-99, at a time when international commodity prices have been falling, the closing of ministry extension offices and the elimination of crop extension specialist positions will have a detrimental effect on farming operations."

We find this to be factually incorrect. There has been a change, of course, to the property tax system affecting farmers. Under the new system, farmers have eligible farmland and outbuildings taxed at 25% of the normal residential tax rate in each municipality instead of paying 100%, as they previously did, and then receiving a rebate through the farm tax rebate program of about 75% of their taxes paid. As part of the government's local services realignment initiative or the Who Does What program, the benefits of the former $150-million to $160-million farm tax rebate program were maintained through the creation of a special property tax class for farmland.

Mr Christopherson: Which witness said that?

Mr Arnott: I'm not sure which witness said that, but again, if we're going to leave this sentence in the way it is, I think it's important to say that some presenters suggested the government has done this. Again, it's our contention that it's inaccurate, given the fact there were changes to the budget of the Ministry of Agriculture and Food perhaps, but the most important change was the change in the property tax rebate program for farmers, where they previously received a rebate of 75% of their taxes paid on their farmland and now pay a different rate of 25% on the farmland and don't get a rebate any more.


Mr Christopherson: I want to avoid a problem or I'm going to head into one. I can appreciate what it is you're trying to inject, Ted, but that extensive a piece to add when nobody really came in and made that case for you is really not reflective. But I am open to other suggestions to raise your comfort level.

Ms Mushinski: Could I ask a question?

The Chair: Go ahead.

Ms Mushinski: Where did the comment, "In areas like Chatham-Kent, where approximately 70% of the economy is dependent on agriculture, farmers are experiencing considerable hardship" come from? Did that come from representatives of the Chatham-Kent-

Mr Kwinter: We met in Chatham, yes. We had hearings in Chatham.

Ms Mushinski: OK, so that came from the farming community witnesses?

Mr Kwinter: Yes, the groups that came to see us.

The Chair: To respond to Mr Christopherson's point, I think the point with regard to the $453 million, the $296 million-and I stand to be corrected-I think that was a pull from the Ontario Federation of Agriculture presentation here in Toronto. So maybe you want to zero in and identify that that was made by a witness, or witnesses, whatever.

Mr Arnott: That's fine. It's important to point out that perhaps it was the opinion of one of the witnesses or specifically which witness it was. That's fine, but I think it's unacceptable the way it's worded because, again, it's a point of major disagreement.

The Chair: So you're suggesting then that we put in front of the reduction-

Mr Arnott: Factually incorrect from our perspective.

The Chair: -"a witness made the presentation" or whatever. How you want to word it, I don't know.

Mr Arnott: OK.

Mrs Molinari: Can we name the witness?

Mr Arnott: You could name the witness; that's fine. "The Ontario Federation of Agriculture suggested" or "alleged... ."

Interjection: Not "alleged." They did say it.

The Chair: So we'll have the researcher check out the source of information.

Mr Arnott: I think it's fair to point out that if there was a change in the overall budget of the Ministry of Agriculture and Food, the change in the property tax rebate program that the OFA had asked for for years, that that also be included in that paragraph. The OFA was on record for many years saying that the rebate program was not acceptable and that farmers shouldn't have to pay property tax on their land, and governments for years accepted that to a point and created this rebate program. But the change the government made a few years ago was something the OFA applauded.

Mr Christopherson: Again, that's for you to debate in your caucus as to what you'd like to see in the majority report, as opposed to a reflection of what was put before the committee.

The Chair: We'll have the researcher look at how they made that particular presentation, or reference to that particular point.

Mr Arnott: All right. Thank you.

Getting into the trucking section, the second paragraph, about the middle of the paragraph, there's a sentence that begins, "It is estimated that the various taxes on the industry result in revenues of approximately $200 million per annum." More accurately, we would prefer to see the dollar figures included there, "$175 million to $200 million per annum," because I'm afraid that the $200-million figure may overstate the actual impact.

The Chair: Comments on that?

Mr Arnott: It provides a range of between $175 million to $200 million per annum.

Mr Christopherson: Can I ask through you, Chair, to the researcher who made the statement?

Mr David Rampersad: The Ontario Trucking Association.

Mr Christopherson: Why don't we just put in there that they said that?

Mr Arnott: Yes, you could, or you could say "up to $200 million per annum, as was stated by the Ontario Trucking Association."

Mr Christopherson: So you want to say, "It is estimated that the various taxes on the industry result in revenues of up to $200 million per annum"?

Mr Arnott: Yes.

Mr Christopherson: But that does put an absolute cap on it. Not to split hairs, but I want to know how they presented it. They may deliberately want "approximately" because they think it's $190 million to $210 million, so they wrote in "approximately $200 million." I just wouldn't want to put an artificial cap on what they were saying is the figure.

Mr Arnott: Did they not say it was $200 million?

Mr Christopherson: I don't know. That's why I was suggesting-

Mr Arnott: I'm just suggesting that in terms of accuracy, it's between $175 million and $200 million, and it may fluctuate from year to year, I suppose.

Mr Christopherson: I don't think there would be vast disagreement-can we ask David to take a look at it?-if we were to give direct attribution or acknowledge that there was some flexibility around this figure $200 million. What I wouldn't want to do, Ted, is just say that the association wanted an upward limit of $200 million when maybe they didn't. They may have deliberately wanted it as 200 because they thought, "Give or take," and we've changed what they think.

Mr Arnott: I see what you're saying.

The Chair: We'll reference their presentation.

Mr Arnott: OK. Thank you.

The very next sentence in the draft report reads, "Moreover, the price of diesel fuel is now approximately 176% higher than it was a year ago." It's my understanding that this statement is incorrect. The report should indicate that the price of diesel fuel is now approximately 146% higher than it was a year ago, as of last week.

The Chair: I think the truckers association pointed out the figure 176% in their presentation.

Mr Arnott: One hundred seventy six? Could we attribute that-

The Chair: We'll check it out.

Mr Arnott: Again, check that out. I think it's also worthwhile to note that the tax on diesel fuel has been 14.3 cents per litre since January 1, 1992-

Mr Christopherson: No.

Mr Arnott: -and that it has not been increased since that time. For my part, I think it would be helpful for people reading the report to know that.

Mr Christopherson: I'm sure you do.

The Chair: I think this is the same debate we had before. It probably can be introduced in the appendix of the report.

Mr Arnott: OK, going to page 9, the paragraph on tourism. About halfway down that paragraph there's a sentence which begins, "However, factors such as high property taxes, insufficient government marketing budgets and low-quality attractions, among other things, are threatening its future." I think it's worthwhile to point out that the provincial government committed $120 million over four years in the 1998 budget to a new Tourism Marketing Partnership Corp to improve the marketing of the province to tourists who live in Ontario and also to residents who live outside of Ontario.

There have been a number of changes to assist tourism-related properties through the property tax reform process, through the 10, 5 and 5 caps. The government has an eight-year plan to reduce business education tax rates in municipalities where rates are above the provincial average. What we would want to see as a minimum in terms of this statement would be, "Some witnesses suggested that factors such as high property taxes, insufficient government marketing and low-quality attractions" and so forth.

Mr Christopherson: Where exactly do you want to insert that, Ted?

Mr Arnott: At the start of the sentence. "Some witnesses suggested that factors such as high property taxes, insufficient government marketing budgets" and so forth.

Mr Kwinter: Our only qualification, unless we can attribute it to some organization or somebody, if it's just, "I don't where it came from, I don't know where you got that number," then I have no problem with "some witnesses."

Ms Mushinski: I have a question. What was defined as "low-quality attractions"? It's almost like an oxymoron.


Mr Rampersad: The tourist attractions, particularly in Toronto and outside, are not being maintained or kept up. In fact, the quality has been deteriorating.

Ms Mushinski: You're not talking about restaurants.

Mr Arnott: It was the Greater Toronto Hotel Association that made that point, wasn't it?

Under the section entitled "Small Business," the first sentence reads as follows, "Small business is an important creator of jobs but access to financing is a particular worry since there appear to be fewer sources of financing now available to small businesses than in the past." We would like to see some statement which reflects the fact that the government is moving to simplify small business financing through changes to the Ontario Securities Commission regulations. The proposed changes would significantly alter the regime for prospectus and registration exemptions, which would assist small businesses that are trying to find capital to fund their operations.

The second sentence reads, "Venture capital funds are not appropriate for the sector." We would suggest that venture capital activity in Canada is growing at a very strong rate and we would want to encourage venture capital to be more available to small business.

Ms Mushinski: That's factually incorrect.

Mr Kwinter: That is not factually incorrect. That point was made by the CFIB that venture capital is not appropriate for small business. It depends on your definition of a small business. They were talking about their particular membership, which is a very small mom-and-pop store or something else. No venture capitalists are going to put any money into that because the administration costs are prohibitive for the amount of money they're looking for. The big concern they have is that old cliché about, "They're too light for heavy work and too heavy for light work." They fall into this little niche where they can't get that money and that's their concern.

Ms Mushinski: It doesn't say that, though, anywhere in that section.

Mr Kwinter: It says, "Venture capital funds are not appropriate for the sector." The sector we're talking about is small business, and they're saying there are "fewer sources of financing now available to small businesses than in the past." That's their concern.

Ms Mushinski: But it doesn't say that anywhere in that section. All it says is: "Small business is an important creator of jobs but access to financing is a particular worry since there appear to be fewer sources of financing now available to small businesses than in the past. Venture capital funds are not appropriate for the sector." It doesn't say that CFIB argued that venture capital is not appropriate for the sector.

Mr Arnott: I don't think we want to say that venture capital is not appropriate. We might say that venture capital is not currently available in a big way to small business. That may be so.

The Chair: I think that if you reference CFIB, it probably would eliminate all the concerns you have. It's a presentation that was made by them.

Ms Mushinski: But we don't agree with that.

Mr Arnott: I'd still want to check that, because I think it's a challenge for government, perhaps-government with a small "g"-if venture capital is not available to small business. What can we do to stimulate and encourage venture capital to be available for small business?

Mr Kwinter: I don't want to editorialize, but just so you know the concept of venture capital, the venture capitalists come into a business with one intent: They want to invest in a company where they in turn can maximize their return and take it public and do whatever they have to do to get a return on their investment. It isn't appropriate for them to go into a really small business, because that business is never going to go public and is never going to give them that chance. They're not just there to invest money in risky businesses. They're in start-ups, in high-tech kinds of things where normal financing is not available. But there's got to be an upside for them.

Mr Arnott: Many of those are small businesses, though; in fact, probably all of them.

Mr Kwinter: Yes, but this is not us; this is the CFIB saying that in effect venture capital funds are not appropriate for this sector. That's the sector they were talking about which is, if you want, the bottom end of the small businesses. They're the ones that have the biggest problem. If you get a couple of people who want to start up a business, it is very difficult for them to get any kind of funding, and that was a concern that they were expressing. They're saying there are fewer of those funders available now than there were in the past. You may not agree with them, but that's what they're saying, and if you attribute it to the CFIB, then it solves the problem. That was the point of their presentation to us.

Mr Arnott: That's fine. You could attribute it to the CFIB if that's exactly what they said. It's probably a summary of a fairly complex argument they may have expressed.

The Chair: For clarification, for those who were up north, we heard the same discussion from the mine developers, prospectors, that venture capital has dried up for small business and the prospecting business and it's gone to the high-tech business. That's where the flow of capital is going. So if we reference the CFIB here, I think it pretty well clarifies the situation.

Mr Arnott: I don't think we have a huge disagreement here, but it is fair to reference the CFIB as having made this statement and check it out to make sure. The words that I'm a bit hung up on, and I'm sorry if I'm hung up on them, are the words: "Venture capital funds are not appropriate for this sector." I know of a company in Waterloo called Research in Motion. It started as a very small business and it now has a market capitalization in the billions of dollars. It started as a small business and I assume it had venture capital money at the start.

There are some small businesses that can access venture capital, perhaps because of their nature, if they are a high-technology business or whatever, and it's a good idea. I think it's up to maybe the government to find ways to make sure that more small businesses have an opportunity to access venture capital. That would be fine.

The Chair: Yes, but I think Research in Motion would not probably be a candidate as a member in the CFIB.

Mr Arnott: Well, it may have been at one time.

The Chair: Because it's the Canadian Federation of Independent Business, and Research in Motion is a high-tech firm.

Mr Arnott: It started as a small business.

The Chair: It's not the type of membership that the CFIB has.

Mr Arnott: But most large businesses started as a small business.

Mr Kwinter: There's no argument there at all. The problem you have is that if you're talking about the high-tech business, and you have that as a separate category-and you talked about some of these people having trouble. I think if we attribute it to the CFIB, they're saying that more and more people are becoming entrepreneurs, more and more people are starting up their own service industries or service businesses and they are just not candidates for venture capitalists. The nature of their business is such that a venture capitalist has no interest. If someone is going to start up an office cleaning business, venture capitalists say: "That's not our role. We have no interest in that."

The point they were making-this is the CFIB-is that more and more people are leaving the workforce to go into their own small businesses, to become entrepreneurs, but unfortunately there isn't a source of venture capital for them. As we go further along, they talk about: "Although the government has tried to improve access to financing for small business, its efforts have not been extensive, either in application or in their impact." This is their opinion. Whether you agree with it or not, this is what they're saying.

The Chair: If we're done with that section, have you got anything else dealing with small business?

Mr Arnott: No.

The Chair: Then we'll stop here and we'll recess until 1:30.

The committee recessed from 1159 to 1331.

The Chair: We'll bring the committee back to order. We'll take up where we left off, at page 9 with "Northern Development."

Mr Arnott: Just for the benefit of all members of the committee, could you point out again exactly what page we're on?

The Chair: We're on page 9. We've completed "Small Business" and we'll start with "Northern Development."

Mr Arnott: We think the section on northern development was well done, and the reference to snowmobiling is particularly important, given that a number of the presenters were talking about that.

For our part, we would like to see some recognition in the report that talks about the Northern Ontario Heritage Fund Corp approving about $5 million in financial assistance to the Ontario Federation of Snowmobile Clubs in September 1999. It's my understanding these funds will be used to give the organization the opportunity to develop and improve snowmobile trails, purchase grooming equipment and provide additional signage in order to make the trails safer and more user-friendly.

The government has facilitated an Ontario snowmobile task force that will identify major issues within the snowmobile industry, addressing five categories: sustainability; land use securement; legislation and policy; safety and enforcement; and emergency services. However, we would say that this section on snowmobiling is good. We would like to see further recognition of the points I've just made.

Mr Christopherson: No.

Mr Arnott: No?

Mr Christopherson: No, of course not. It's the same argument as before, Ted. It's nice and I'm sure we'll see it in your majority report.

The Chair: I can't remember if in the presentation there was any monetary amount. There was recognition of the fact that the provincial government has provided money for trail development and enhancement through the northern Ontario heritage fund. That's the second-last sentence in the bottom paragraph.

Mr Arnott: Exactly, in the amount of around $5 million. So we would suggest that that might provide additional clarification.

The Chair: We'll have the researchers check that, if we could.

Mr Arnott: Thank you, Mr Chair.

Mr Christopherson: It was our understanding that if it was referred to, then we'll include it; if not, we won't.

Ms Elaine Campbell: Can I just ask for some clarification? Is it the committee's wish to have all of Mr Arnott's points included?

Mr Christopherson: No.

Ms Campbell: Just the dollar amount?

The Chair: Yes, if it's in the presentation.

Mr Arnott: Page 10, moving along, the section on mining. There is a statement, the very first sentence in the paragraph, that I want to refer to. It says, "The mining industry contributes $1.5 billion to provincial revenues each year and generates approximately 160,000 direct and indirect jobs." Just to clarify, we think the report should read, "The mining industry contributes $1.5 billion to government revenues each year and generates approximately 106,800 direct and indirect jobs." Again, this is a point of clarification.

Mr Christopherson: If I can, if it should be 106,000 instead of 160,000, that's just straight factual checking. So, obviously if 106,000 is the number, that's what will apply.

Mr Arnott: Yes.

Mr Christopherson: And we'll ask research to do that.

Mr Arnott: If necessary, what we would like to see is that, if these numbers conflict with a presentation, perhaps we could make reference to that fact.

Ms Campbell: Actually, one of the witnesses did say 160,000 direct and indirect jobs, but I'll double-check.

Mr Christopherson: Why would you want it lower?

Mr Arnott: It's just a more accurate figure from the government's perspective. I believe it's a more accurate number.

Mr Doug Galt (Northumberland): We wouldn't want to be accused of trying boost up the numbers.

Mr Arnott: No, distort the number of people working.

Mr Christopherson: So nice to have your contribution this afternoon, Mr Galt.

You went from "provincial" to "government." I'm just curious why. Not that it's the end of the world, but I'm just curious, why would that jump out to you or your staff?

Mr Arnott: "Provincial revenue" doesn't necessarily mean revenue that's coming in to the provincial government.

Mr Christopherson: I see. We wouldn't take it that way.

Mr Arnott: We might assume that. But to be more clear, I think it would be appropriate to say "provincial government revenues" or "government revenues."

Mr Galt: It changes the connotation from being purely provincial to all government when you say just simply "government. Isn't that what you're putting in?

Mr Arnott: I believe it's "provincial government revenues."

Mr Galt: You're saying, "$1.5 billion to government revenues each year," so that statement says to me municipal, provincial and federal.

Mr Arnott: I think I said "provincial government revenues."

Ms Campbell: If you give me the direction, I'll put in "provincial government revenues."

Mr Christopherson: Then we're going to have to check and see what they said. It's going to make a difference if it's $1.5 billion directly to the provincial government or whether it's $1.5 billion total to all levels of government.

The Chair: We'll clarify that.

Mr Arnott: The next statement I want to make reference to is the second sentence in that paragraph, which in the draft report reads, "In northeastern Ontario alone, over $1 billion is paid annually in salaries and benefits to mine workers." From the information I have it's my understanding that actually $1.2 billion is paid annually in salaries and benefits to mine workers. If we want to be factually correct, that's a more appropriate figure.

Mr Christopherson: We do have to be careful, though, with great respect. Just because you say it, or for that matter that we say it, it doesn't make it true.

Mr Arnott: I've been advised that that's the case.

Mr Christopherson: Normally you get an agreed fact by having disparate groups agree on a common number. I'm just pointing out that if we have a disparity between what a presenter said and what the government said, it isn't automatically true that the government is correct. It's not etched in stone, so we need to keep that in mind when we're asking that these things be clarified. If they're saying one thing and the government is saying another, then we need to have at least a look at what number we're reflecting and why.

Mr Arnott: Perhaps a way around it would be to suggest that the presenter said such and such and the government figures would indicate-

Mr Christopherson: I don't know that we would include "the government figures," but certainly attribution is a good way to clear it up.

The Chair: The presenter did state "over $1 billion," so I think if you were to introduce the witness's-

Mr Christopherson: OK, then why don't we just attribute it?

Ms Campbell: Can I suggest a rewording?

The Chair: Sure, go ahead.

Ms Campbell: Could I suggest that it be reworded to say, "In northeastern Ontario alone, the committee heard that over $1 billion is paid annually in salaries and benefits...."?

Mr Christopherson: That's fine with us.

Mr Arnott: If that's what we heard. I'm trying to remember exactly what we heard, but I'll take your word for it.

The Chair: We'll make sure the figure is correct, but the wording will be in that fashion. Go ahead.


Mr Arnott: In that same paragraph, about the middle of the paragraph, we have a sentence that reads, "For example, between 1996 and 1998, Ontario mineral exploration experienced a 36% decline in investment...." To be very clear, we would like to change that to "Ontario mineral exploration expenditures experienced a 34% decline," which in my understanding is a more accurate figure. Getting back to what you have said, if that's exactly what we heard, we would want to attribute that to the witness, but as I understand it, it's actually a 34% reduction in expenditure for exploration.

The Chair: Any problem with incorporating "exploration expenditures"?

Mr Christopherson: Same discussion as last time, Chair: as long as it's an accurate reflection of what was said. If not, then we need to find compromise language or bring it here and we'll make a decision, even if it includes a vote as to what we'll go with. Again, where we have something we can count on, when most people agree on the same numbers, especially if they disagree on what ought to be done from here.

Mr Galt: A question, Chair.

The Chair: Go ahead.

Mr Galt: I questioned the mining organization, whatever their right handle is, when they were in about if they dropped it from 20% to 12%, or if we dropped it for them, how many jobs that would create, and it was my understanding they were going to do some looking at that. I guess we've never heard back from them?

The Chair: I never received anything.

Mr Galt: That would have a significant effect on the Minister of Finance, possibly, if they had those figures.

The Chair: Nobody else has received anything.

Mr Galt: That's fine. That would be consistent with Quebec, from what we were being told. If it created a large number of jobs, the Minister of Finance just might go for it. I had the feeling they were going back to look, but maybe I'm wrong. Anyway, thanks.

Mr Arnott: Those are the only changes we want to recommend to page 10.

Turning to page 11, the very top of the paragraph, we're into the discussion of the Early Years Study and Fraser Mustard's work. Ideally, we on the government side would like to see some recognition of the fact that the 1999 budget committed up to $30 million annually for the early years challenge fund by the year 2001-02 to match business and community contributions to early child development programs, and reference also to the five demonstration projects which have been set up throughout the province to support early child development and parenting. These projects demonstrate how to bring business, voluntary and charitable organizations together to support early child development.

Getting back to your consistent point, Dave, I think there was some recognition in the presentations that we listened to about the government's response to the earlier study. It seems to me there was.

Mr Christopherson: Before we put too fine a point to that whole thing, that's always the touchstone and I think we have to use what was presented, but if we're not careful, what will happen is-and this would be new; I don't know that it's necessarily helpful-but in the future each of us will be thinking of our report ahead of time and those groups that we might have a close tie to, asking them to bury that in there so that we can have the argument about the content of the generic summary of what we heard versus putting all of that in our government report.

I appreciate what you're saying. You've raised it. It's not here, and normally I would object because it wasn't heard. I think you're saying it was heard. But clearly what it's meant to do is to provide a different perspective; by the time the reader has finished the paragraph, an attempt to put the government in a better light. That's your job, and I understand and respect that, but that's not what this report is.

So as much as I'm arguing it's got to reflect what we heard, just because we heard it doesn't mean we have to put it in the report. Just because we heard it doesn't mean we reflect it. Somebody could have come in out of the clear blue as a citizen and said, "Inflation's going to be 25% next year." Would we include it? Probably not, for good reason.

I point that out because I think you're in the same area again in terms of trying to reflect a different outcome by the reader. Yes, your memory is possibly right that it was said by someone, but what it's going to do is force us into negative votes when we're almost through the document.

Mr Arnott: Could we at least have our research staff check to see to what extent people acknowledged the efforts of the government in this regard?

Mr Christopherson: Ted, I caution you, if you're going to do that, then maybe we are going to meet the rest of this week, because I'll go back in every one of these categories and I'll check my papers and find something that somebody said and ask that that be put in there just because it was said.

You've really got to be careful. You're going to get your chance. You're going to get your report. You've got the vote; that's a given. We're not squealing about that. But given that we are trying to have this report reflect the demeanour that the total committee tried to present as we moved around the province, which was, "We want to hear from you, we want it be even, balanced, fair; give us your thoughts, give us your hits," if you will. I think your folks have been a little overeager here in terms of wanting to do what they want to do in their report and spilling it over into this.

Mr Arnott: Reading what's there already: "Private and broader public sector groups spoke positively of the report of Dr Fraser Mustard and Margaret McCain entitled the Early Years Study and called on the government to pay close attention to its recommendations." The government has responded in a number of ways, as I outlined earlier, to this report, so I think it's germane to the discussion, even if there was one sentence which acknowledged that.

Mr Christopherson: Which acknowledged what?

Mr Arnott: The government has responded to this report by implementing a number of demonstration projects.

Mr Christopherson: Come on. That's pretty political, Ted. It sounds like a news release. in fairness. Right? Because you could also turn it the other way and say, "In spite of the government doing this, it's still a disaster," if you like that. It still contains the information you want.

Mr Arnott: What do you think, Doug? Tina?

Mr Christopherson: We're close. We're at page 11. We've only a few more to go. You guys have got the power; co-operation you have to buy.

Mr Arnott: I want to co-operate. I still think it's a reasonable thing to include, but if you object, we'll concede that point.

Moving on to page 11, the entire section on post-secondary education, ideally we would like to see some reference to the programs the government has committed itself to and is presently delivering in terms of post-secondary education support to students: the Ontario student opportunity trust fund, for example, the Aiming for the Top scholarships, and the grant program which forgives student loans above $7,000 per year, all of which help to ensure that post-secondary education continues to be accessible for all students who are qualified to participate in post-secondary education.

Mr Christopherson: That sounds like a statement we might make-

Mr Arnott: Another press release?

Mr Christopherson: -he says facetiously. Come on. This is easier to take when you don't keep a straight face when you're presenting. I realize you've got to do what you've got to do.

Mr Arnott: Again, I think it would improve the report to include those facts.

Mr Christopherson: I'm sure you do.

Mrs Molinari: I have a question. The report, once it's completed, the inclusion in this report, is it only the presenters or is it also our common discussion and comments that we've made in response to the presenters? If it's to include some of the comments that we've made in a presentation, certainly this is one of them that was clarified for some presenters who were not aware of some of the programs.

The Chair: My interpretation of committee reports, and I stand to be corrected, would be that we would report on what presenters told us as it pertains to northwestern Ontario or education or health care. There might be some commentary, some discussion between the presenter and the party in power or the opposition or the third party or whatever, but I think the role of the committee is to report to the ministry the concerns and what we heard. That's the way I would look at it. I stand to be corrected on that.

Mrs Molinari: Further to that, then, when we engaged in questions and in comments to the presenter's report, there was an acknowledgement of some of the comments that were made or a denial of those comments that were made either by the government or the opposition side. So is that not something that should be reflected in the report?


The Chair: You bring up a very valid point. We discussed figures a while ago; I can't remember on which page. On page 9, I think we were talking about 160,000 or something, and somebody said it was 160,800. Maybe if a committee member had challenged a presenter that the figure was not totally accurate, for the record we probably should have incorporated 160,800, but if the presenter is not challenged, I think we have to go by that particular figure.

So with regard to some of the statements, it may entail going back to some of the discussion that occurred if there was some correction. But again, Mr Arnott's point is that he wants to introduce Aiming for the Top scholarships, and I don't recall if that was discussed.

Mrs Molinari: With due respect, Mr Chair, I do recall bringing those issues forward when presentations were made with respect to the funding for education, and post-secondary education in specific, that there were a number of things the government had done and implemented to take care of some of the concerns that were expressed. If you review Hansard, you'll see that I did raise some of those issues.

Mr Christopherson: If I can, Chair, I agree. The point is well taken. But again, I think there's a difference between what the report suggests we heard overall, to try to get a feel for it, versus the interplay between members and presenters. That's why Hansard is there, and we're not trying to replicate Hansard.

Again, it's actually surprising we can get this far, given the diversity of thought between the three parties that are here and just the massive amount of information that we heard. I know it's difficult. Maybe you could appreciate, if you were sitting over here, that I'd like to see it loaded up with a whole lot more anti-government stuff. A lot of it was said and isn't reflected in here, but that's not the purpose of this document. Our document will do that. You know that and I know that. Yours is going to put the best light possible on the government and you can do whatever you want with it. But again, we're trying to find a document here that we can stand behind, and every time you folks take that next step, it creates a problem.

Mrs Molinari: I appreciate that, and in the spirit of co-operation my questions are more for my own knowledge as to how we put together this report. I need to understand what I can argue a point over and discuss. If in fact our comments and our clarifications to the presenters were acknowledged or denied, then that should be reflected in the report. Otherwise, if you've got presenters, they can say all kinds of things and they would be included in the report.

Mr Christopherson: So you're suggesting that your comments fit into sort of the exemption that the Chair mentioned, that somebody said something and it was refuted?

Mrs Molinari: I believe putting in the fact that there are a number of things-the Ontario student opportunity trust fund, Aiming for the Top and these things were brought into the discussion to clarify some of the issues that were brought forth in the post-secondary panel, and it wasn't disputed by the presenter. I'm not trying to be argumentative. I'm trying to understand the process here so that I can better participate.

Mr Christopherson: It's not clear, and that's why you're having difficulty and we're sort of groping along step by step as we go.

There isn't a really clear formula. Anything really could be in and anything could legitimately be out by majority control, which is you folks. The fact that you're trying to reach a consensus around this document means we all have to approach this differently than just in a partisan fashion. I realize that you would love to have details in there that refute things, but I think anybody who really watched the presentation would argue and agree that most everything we heard from the educational side of things was not very positive. That's just the reality. I think, if you take what's here, you've done quite well in terms of the way it comes across.

But if I could raise another point, maybe as an extension of that, Chair, we're very close to the end anyway, but I've got to tell you, I'm still not clear at this point whether we're looking at four reports, whether it's one report that hopefully we will all endorse with three reports attached. Is it going to be three reports, which is one committee report that has the majority government position with two minority reports attached? That's kind of the one I prefer, which is why I've made the argument that this is important, but after the government adopts their own majority report, this becomes relatively moot in terms of it being a written summary of the key things that we heard.

Without that, I think it's hard to answer your ultimate question. If you go the latter way, sort of the one that I prefer, where the committee report is one that we will vote against, the official opposition will vote against, you'll carry with your majority, and we'll attach our minority reports, it is the easiest. You could spin everything you want for as long as you want and go for it.

It's only in the context of this document, and again I make the point-not to make the researchers' work seem like it's not important; it's been an important part of the process. But at the end of the process, personally I would give it the same status as individual reports that we heard. It's important; it's there to be looked at. I think it says something if we can agree on what some of the factual points are. However, for the purposes of the public looking at us, they'll want to see: What does the government say, what do the Liberals say and what do the NDP say?

The Chair: For clarification here with regard to report writing, I'll quote section 129, (a) to (e):

"(a) The report of a standing or select committee is the report as determined by the committee as a whole or a majority thereof.

"(b) No minority report may be presented to or received by the House.

"(c) Every member of the committee other than the Chair shall be permitted to indicate that he or she dissents from a particular recommendation or comment. The committee shall permit a member to express the reasons for such dissent in an appendix to the report.

"(d) The Chair of a committee may establish a reasonable deadline for filing any dissenting opinion with the clerk of the committee."

We talked about that this morning, and that's to be done by March 21. I don't think you were here, Mr Christopherson, so if you'd like to write this down.

"(e) The report as agreed to shall be signed by the Chair on behalf of the committee and shall be presented to the House by the Chair or by another member of the committee authorized by the Chair or the committee."

So it's my understanding that there would be one report with appendices attached to it. That's my understanding.

Mr Christopherson: Right, which will of course in reality be a reflection of the government because it will be the majority, and I don't think I'm going out on too much of a limb to suggest we'll probably vote against it.

In terms of what you've just said, Chair, I don't think it argues against my point that this draft becomes a reference point of the summary of all that we heard and need not necessarily, and likely will not, be what the committee ultimately adopts. Certainly, hearing from Ted, it would seem that even if you went with this as a template, there's a lot of stuff you're going to want to add at the end of the day; it'll be a different kind of report.

To go back to Tina's point, it's really not so much, at the end of the day, did anybody say it? That's an important point for us to clarify, but just because it was said doesn't mean it necessarily has to be reflected in here, and at some point-it can't be totally anti-government; you're never going to support it. It can't be totally pro-government; we won't support it. So somewhere in between is where we're all trying to find ourselves.

Mr Arnott: In relation to Tina's point, I think she's quite right that the dialogue that takes place with the presenters and the witnesses can lead to information that would be very important to contain in the main body of the report, or the recommendations that might be put forward by the opposition parties or the government side. But I think, Dave, you're quite right too that there may be some stuff that you would want included in the body of the report that we can't accept.

Mr Christopherson: I didn't come in here with all that stuff, right?

Mr Arnott: We might want to vote that down if it came to a vote. But in the spirit of co-operation, I think we're trying to talk this through, and that's a good thing.

My understanding is of course that there's one report and it represents what we heard, based on our broad agreement. I suppose if we could have some sort of motion saying that we all agree that this is a fair representation of what we heard and then the recommendations in the next part; we may have different recommendations than you would want to see in the final report.

Mr Phillips: We can do whatever we want to do, as they say, but in the past we've done this: The first paragraph is an introduction and it says, "This report is a summary of the information received by the committee during the hearings."

Mr Arnott: What year's report is that you're quoting from?

Mr Phillips: This is 1998. This is the last one that was done, but I have a feeling, without looking at 1996-97, that there would be a similar paragraph.

Mr Arnott: We've got 1997 over here.


Mr Phillips: "The report is a summary of the information received by the committee during the hearings. It has been prepared on the basis of the information presented by the Ministry of Finance, ministry staff and invited witnesses. It excludes information on the 1998 budget," blah, blah, blah.

As I've been listening to this debate, I've been trying to say, "All right, does what we're putting in this report reflect what we heard by the minister, the minister's staff, and witnesses?" At the end of the day, as they all say, for that part I can say: "Yes, it's a fair compilation. I don't agree with everything in there because I may choose to disagree with witnesses, but that's what we were advised."

Then in all likelihood we will have difficulty supporting the recommendations that might come forward. So I would be saying to the public: "The first part of the report we felt was a fair compilation of what we heard; not everything, and I don't agree with everything, but that represents a good summary. The recommendations," as I suspect will be the case, "we had difficulty with, so we submitted a dissenting opinion." I think that's what we call it, if I'm not mistaken, Mr Chair, and the dissenting opinion would say, "We believe that there's a different set of recommendations that we should follow."

That's what I kind of thought we were doing. Therefore today, unless it's clearly not something we've heard, I won't get everything in here that I wanted, but none of us will. I don't know what 1997 said. I don't know whether that was a similar paragraph.

The Chair: The 1995 has a similar paragraph. I think most of them have. It's based on some of the-as you quote.

Mr Arnott: I'm not suggesting we depart from that established routine, Gerry.

Mr Phillips: I was just responding to Dave.

Mr Christopherson: It's good to hear this discussion, because it still leaves me unclear as to exactly where we are going. If we go with that alone as a fresh starting point, then all the things you wanted to put in here, Ted, and all the things your folks didn't even put on your list that you might ultimately want, when it's not necessarily a mode of co-operation-where will all that happen? When do those amendments take place? Or is this it; once this is done, that's it, your work is finished?

Mr Arnott: No.

Mr Christopherson: What are you going to do?

Mr Arnott: We've gone through page by page, and I put forward some suggestions. You agreed to some and you rejected some, and we conceded some of those points. I would expect that the researchers are now going to rewrite the draft report into a final report, or at least into wording that's acceptable.

Mr Christopherson: Where were you planning to reinsert the things we didn't agree on today?

Mr Arnott: I think you have suggested that that might be something we would want to put in the government recommendations. That's something we might entertain. I don't know.

The Chair: To clarify, Mr Christopherson, if we look at the 1995 report, appendix A was the report of the government caucus, appendix B was the dissenting opinion of the Liberal Party and appendix C was the dissenting opinion of the Progressive Conservative Party.

Mr Christopherson: Right, and that makes the most sense to me.

The Chair: So you would have three appendices. If the recommendations he might bring up during the discussion this morning and this afternoon are not consented to, they would probably be presented in the appendix report of the government caucus.

Mr Christopherson: So at the end of the day there are four documents.

The Chair: One document with three appendices.

Mr Christopherson: Yes.

Mr Phillips: That's fine. If my memory serves me right, 1995 may have been an unusual year in that the Conservatives were not in power then. We may be better to look at 1996, 1997 and 1998. I think there will be two choices for the government. One is to simply submit recommendations and word them in a way that captures the concerns of Mr Arnott, or have three appendices. The three appendices seem odd to me. There is no official report and dissenting reports; there are almost three dissenting reports, if you follow me.

The Chair: We can do it differently. For instance, in 1998 we had appendix A, special witnesses; appendix B was the witness list; appendix C, Liberal Party dissenting opinion; and appendix D, New Democratic Party dissenting opinion. I'm willing to entertain whichever way you want to proceed with it. I thought that in some of the discussion we had, if we had a report we could consent to and then an appendix from each side-but I can entertain whatever the committee wants.

Mr Phillips: Right now my feeling would be that we have the first part, the body of it, in a way that we can all say, "I can agree to that." You can almost assume there will be a Liberal Party dissenting view, which will be several pages long. Then I think it's up to the government members to decide-I have a feeling it would be awkward to have a dissenting opinion from the government caucus. It would be more appropriate that you have several pages of recommendations, and in those you incorporate the issues that aren't in the body, what we are talking about right now. My vision would be a summary of the witnesses, a section on the recommendations with whatever editorial comment you want to put around them, and that would become the report, with maybe a witness list. Then there would be two dissenting reports from the Liberals and the NDP. That would be most logical, I think.

The Chair: Mrs Molinari.

Mrs Molinari: I'm trying to understand how this all plays out, and my confusion is around not being able to include some of the comments we made in the discussion. I don't see the purpose of our having our time to discuss or question or make comments when the witnesses present if none of that is going to be taken into consideration in the compilation of the report. If some comments and statements that witnesses make are not true, it is incumbent on the government to clarify that for the purpose of discussion and for the purpose of being included in the report, since we don't have an opportunity to have a report as both the opposition parties do. The Liberal caucus has its opinion on the report, and the NDP caucus will have its opinion on the report. The government doesn't have another paper that can clarify what is in the report, and so we are at the mercy of reaching consensus here on what gets put into that report. I'm trying to understand what the purpose is, what role we play. When witnesses come and speak and we clarify or ask questions, what's the purpose of that if it's not for inclusion in the report?

Mr Christopherson: Two things. First, with great respect, just because any of us counters something that is presented doesn't automatically make it factually the truth. It may be subjectively the truth as we see it, but there's no guarantee it is universally accepted as the truth. Secondly, I entirely agree with your first point, which is why I saw it differently. But I'm prepared to be very flexible; the third party is not going to wag the dog here, as much as I might like it to. I think your point is very well taken, and I didn't see it that way at all, and I'm glad you are raising it sort of on behalf of your side. Because if your opinion is held back and watered down by virtue of trying to reach consensus, and then we can go full blast in dissenting reports, where is your right to make political statements? That is why I didn't see this, and then just two dissenting reports, as being where we would be, quite frankly. I didn't think you guys would accept that. If we end up there, great, we've silenced you to a great degree.

Mrs Molinari: That's right.

Mr Christopherson: It's true, and it wouldn't take a rocket scientist to see that, which is why I think I'm closer to where Gerry is, although not entirely. At the end of the day, this gets supplanted by a political document that you are pretty much doing and supporting, and we are disagreeing with it. Whether we like it or not, it's very rare that the majority opinion of any committee is anything other than what your government wants. That's how majority governments work. We had the same right, if you would, when we were in power. So I still remain unclear as to how we do this in a way that is fair. I'll just articulate again-and if it needs to get shot down so be it-that I saw this as a sort of piece of the last piece of our collective work where we were working as a group, as a one-entity legislative committee on behalf of the people to allow an airing of what the budget ought to look like from the point of view of those who came forward or who made submissions. That is completely different from the political document that becomes the final report. So when I heard that this report might form the first piece, with other pieces added, the only way to really do it is to add a government point of view as well as two opposition points of view. But as Gerry rightly points out, if you're going to do that, then really the committee, as much as we might not like the definition of the committee, which is the government's opinion, is non-existent. So I really think we need to nail this down, because it's crucial.


The Chair: You have raised a very valid point, and maybe it is my fault, prior to giving directions to the researchers, that we did not give them direction exactly or clearly as to what they should report on. I can't exactly recall the discussion we had, but certainly the direction was to report on what we had heard in the committee.

You bring a very valid point. If somebody raises an issue that is not quite accurate and somebody challenges or corrects the accurateness of the statement or the figures or whatever the case may be, maybe that should be part of the report. However, it's really up to the committee to decide what we put in the report. It's not my decision. Maybe I erred in not asking the committee to give the researchers a clear, concise description of what should be included in the report, but it's up to the committee to decide as a whole what you want incorporated. That's not my decision. Mr Galt, you had your hand up.

Mr Galt: If we could simply flag this-I'm talking ahead of time now for another year-that maybe one of the first things that should be discussed by the committee is how the report will be formulated, identifying some of the concerns coming out of this discussion. It's not something you'd think of ahead of time, but it's fresh in our minds now, so if some of these issues were brought out and put before the committee to make some decisions ahead of time, it might make it a little easier for the author to write it. Now we're thinking of our own positioning and our own agenda and getting a little hung up with that in the debate, but we might be more objective prior to heading out on the road and thinking through the kinds of questions we would ask for information to go into the report. I'm just suggesting that it be flagged for next January or maybe a little earlier-we might get started in November-that it might be discussed by the committee in advance.

The Chair: I think it's a very valid point, because we've spent a fair amount of time discussing that particular issue.

Mr Phillips: I'm actually quite comfortable where we are. The exercise we've gone through is that we're the public hearings on the budget and we've invited a bunch of groups to come and give us their advice. I think you gave the right direction, which is that we need a summary of what they said. We don't need a summary of what we agreed with, we need a summary of what they said, without our own interpretation of what they said on it. That's what this first section is. As we look at next year as well, Doug, right now I would think we should do the same thing. After that, it's over to the committee as to what interpretation we want to put on those witnesses, plus our own judgment on what advice we want to give the Minister of Finance for the budget.

I think that has to be one report that has, if we want, dissenting opinions, but I don't think it can be a Conservative-Liberal-NDP. That essentially defeats the purpose of an all-party legislative committee; that they're not really an all-party legislative committee, they're then a committee of the parties, if you will.

I can predict confidently what we will do, which is write a report not unlike what we've done in previous years. It's then up to the government caucus to do either just recommendations or recommendations with some editorial comment that allows you to get on the record the interpretation you want to put on the recommendations.

I'm back where I started. I'm quite satisfied with the first section as we're proceeding, that it will be, as best we can, a compilation of the witnesses. Then it's over to the committee to put forward the recommendations and deal with them.

Mr Christopherson: I said I'd keep an open mind and I do. Gerry has now convinced me that I disagree with him. That's what that did. I don't know. I'm thinking about it, Gerry, and to others. The notion that on this diverse a question of virtually everything in the province we can find consensus on some reflection of what was heard, not even that we agree but the fact that, out of everything that was said, we agree that these things best reflect the opinion and thought of what we heard, to me that's a major achievement. What normally happens around here in these kinds of things is that right off the bat we lock horns and we all go our different ways and then you hold a whole series of votes and it becomes very partisan. Yet if we can all agree on a 14-, 15- or 16-page document and then deal with our political differences after that, we may have actually improved the product we are delivering to both the government and the people.

I have a lot of difficulty even supporting this. For me, it's going to depend on how we word the motion. Therefore, that will reflect on the kind of process we are doing. But there is only so much support I can give to this document, because from where we are coming we would have put a lot more emphasis on other issues. Rather than the tax cut issue, we would perhaps have talked a lot more about health care and child care, and made those more important by putting them higher up in the report and dedicating more space to them.

Again, in the interest of trying to reach consensus around a series of facts that would be useful in terms of the work we do for the people of Ontario, I was prepared to sort of: "That's not the end of the world. I can live with that. We'll do those things in our report." But you move away from the concept that this document reflects consensus. Whether it's the introductory part or whether it's just part of the record and the government's desire is clearly the first section matters not to me; what matters is that if this is going to form the part of the report where we all agree, then it would make sense to me that all three of us would get a crack at saying what we want to say politically about these issues.

Mr Arnott: But don't you get that opportunity in your dissenting opinion, if you choose to do one?

Mr Christopherson: Yes.

Mr Arnott: Right.

Mr Galt: I understand that the only place we are going to get any opportunity to put in our political viewpoints is in the report itself, because you can't have a dissenting report from the government. The two opposition parties get the opportunity to put forward their partisan viewpoints in their dissenting reports.

Correct me if I'm wrong. We seem to be struggling for a consensus, which lacks the ability for the government to put their views into the report, because we can't have a dissenting report; at least it doesn't make sense.

The Chair: But in the part where you are dealing with the recommendations, you would introduce the government's position or challenge something they may not agree with in the report, and that would be part and parcel of the final report.

Mr Galt: When I look back at 1997, they have a list of 11 crisp recommendations. There are no political overtones; it's just straight boom, boom, boom, boom. I haven't read them in detail, but they don't come in with some of the rhetoric. Are you suggesting there should be a chunk in the recommendations, like an intro to the recommendations, which would be our political position?

Mr Christopherson: When I started this this morning, I was going on the assumption you were at the beginning, that there would be one report, it would be the government's opinion-

Mr Galt: Yes.

Mr Christopherson: -and you would literally ram it through, probably in one vote. We would just say that we disagree with the whole thing, maybe make comments about it-

Mr Galt: Oh, far be it from us.

Mr Christopherson: -take one vote, straight up and down, and then we would attach our dissenting reports. But that has started shifting now, and it certainly changes my strategy in how to approach this.

Mr Arnott: I'm not sure where we're going. It seems to be going around in circles to some degree.

Mr Christopherson: Yes, we are.

Mr Arnott: We have this established procedure that Gerry has pointed out a couple of times, and, having been a long-serving member of the committee, I think he has characterized it very fairly. This is the 1997 report, you have the 1998 report and somebody has the 1995 report. If you go through it, there is some sort of outline, broadly speaking, which attempts to characterize fairly what the committee heard. Then there is a page that says, "Recommendations" and, "The committee recommends the following," and there are 11 things there. I assume that a motion was probably put before the committee-

The Chair: But you would have to vote on the recommendations.

Mr Arnott: -and that the majority of the members present supported it. Then, of course, those who didn't support the motion filed minority opinions, and that comprised the report.

What we were trying to do today was offer clarification that we thought was required on certain points.

Mr Christopherson: No, you were trying to spin it and doctor it.


Mr Arnott: We tried to put in a few germane points that we thought would be of assistance to people that fairly characterized the government's actions in some respects. Again, on some of those points I think we agreed, and I think the research staff understand that and are going to make those appropriate changes. On others, for our part, we conceded your point that it wasn't useful to include that in the report. That's what I recall happened this morning and it went very well.

We're almost done. I've got one more point I want to make relative to page 13 and then we're done with that part of it. Before you came this morning, we had decided that the opposition parties, in the event that they wanted to present a dissenting opinion, would have two weeks from tomorrow to file it with the clerk and that would become an appendix to the report, if I'm not mistaken.

Mr Christopherson: Ted, can I just pursue that?


Mr Arnott: Do you have a problem with anything I've said?

Mr Christopherson: In that context, then, Ted, and I don't have a problem with anything you've said, but you said earlier, when I raised it, that yes, we will look at getting in these points that you wanted to make here, that were rejected, somewhere later on.

Mr Arnott: All right. I don't know if I said that. I think you suggested to me that might be appropriate to put in the government's recommendations, if you want.

Mr Christopherson: Is that where you saw it then, just in your recommendations of our recommendations?

Mr Arnott: I think it was useful to have the discussion on the issues this morning. I would stand by what I was saying before, and it has been repeated numerous times now, that it would be helpful to have that information in the report. But again, I think it's important that there be some agreement around the main body of the report, the presentation of what we heard. I think we've had a good discussion on that and you've accepted some of the points I've made. I think we've tried to listen to what you've had to say and be cognizant of that as well.

Mr Galt: I have some problems. The consensus of the report I think is great. I think that's an ideal route to go, and then the government has their recommendations. Where I have difficulty is when I look at the dissenting report. If they were clear recommendations only, without all the other rhetoric, then I think the consensus is just great. But when you put in all the other stuff around the recommendations, then that's an unbalanced report because it's giving all of the political positioning of the two opposition parties. If they were clear-cut, sharp recommendations, I think it would be a great idea, the consensus as we've been working. But that isn't how I see the dissenting report. In the New Democratic Party's it's a one-pager in 1997, with six recommendations, I gather, whereas in the Liberal one it goes on for pages and pages-nothing nasty, it's from page 1 to page 17 and then there's 18 on the back. There are a lot of graphs and stuff; it has to be a lot of political rhetoric and not recommendations. If it's pure recommendations, I have no problem with the straight consensus of all three parties, but when the dissenting report has more than recommendations, then I have some difficulty here.

The Chair: But in some of the discussion we had in the subcommittee, and I know in some of the discussion I had with the researchers, we wanted to maintain the report as concise as we possibly could without having reference to, "So-and-so said this and so-and-so said that." We can refer to it when it calls upon referring to that particular group, like we've done this morning, and if you have a report of 14 pages and the dissenting report has 30 pages, then the people who are going to read this report are probably going to say, "Why is that?" On the converse, if you have a concise report, it's probably going to entail that if you've got a dissenting opinion, the credibility of your report-if it's twice as long as the report, if I were to read it, and I'm trying to maintain my objectivity here, I would say, "What is this all about?"

Consequently, having said that, I don't know what the problem is, really, except that maybe we should have given, and I probably should have given, the researchers more direct direction initially. But if we proceed in the manner we have gone so far, if the government introduces the recommendation, and those recommendations are going to have to be voted upon, and then with the dissenting opinion attached to the report as appendices-

Mr Galt: Chair, I have another suggestion that might help control the length of the dissenting report. If we were to charge per page for the insertions into the report-

The Chair: That's beyond my control.

Mr Christopherson: Anything to stifle democracy.

Mr Galt: We've been hammered a lot about user fees, and I would think this could be a user fee on the part of the Liberal Party, so much a page for putting it in.

Mr Arnott: Think of the trees you'd save.

Mr Galt: It would be environmentally friendly, help preserve trees.

The Chair: It brings us back to the point where we started.

Mr Phillips: I can live with anything we want to do. I'm not unhappy at all. I thought Mr Arnott was attempting to be accommodating to all of us, to have this first section one where we can all say, "I can agree that represents the witnesses, maybe not with the right emphasis that I might like, nor do I agree with what the witnesses said, but that represents the witnesses." I personally wouldn't mind finishing that off, and all of us can say to whoever wants to hear it, "That doesn't imply that I agree with what they said or that it's totally complete." Then I think it is somewhat up to the government if they want to accept that.

If you don't feel you've got a place to express your editorial views on some of this, that you feel a little bit, "Gee, we're forced to just have recommendations and then the opposition can put all sorts of editorial comment on," I think there's a way you can editorialize around recommendations if you want to do that.

Then on the dissenting report, if we do one, and of course, it'll depend on the recommendations-

Mr Galt: You used up enough pages last time.

Mr Phillips: In that I tend to have to write it, I have no interest in too many pages. So I would undertake to be as concise as possible.

Mr Chair, I'm in your hands. I, for one, don't mind at all the advice you gave the staff. In fact, from my perspective, it was the right advice. I would feel very comfortable finishing this off and then saying to the government, "Now can we see your recommendations?" and then maybe come back tomorrow with your recommendations, if that's appropriate, with whatever editorial comment you want. Again, my experience is that we could spend a lot of time debating the government recommendations, but in the end we in the opposition would have difficulty agreeing to them all, so we'd say, "Listen, we just have difficulty agreeing to them all, and we'll put our own recommendations in."


Mr Christopherson: For the record, only because you've mentioned it a couple of times, Chair, I agree with Gerry that you weren't incorrect in the way you approached this. I think, had you attempted to do that on your own or with the committee, you'd have gotten into some trouble. I think we needed right at the end of it to give the staff the direction, "Give us as generic, balanced and fair a reflection of what we heard as you can, period, full stop, and bring that back to us." So I would have had some concerns about changing that process. I only raise it because you raised it a couple of times. I think you and the committee did exactly what needs to be done vis-à-vis the kind of work that legislative research can provide to a body that's this political.

Mr Arnott: I think the staff have endeavoured to do that. What we've been trying to do this morning and for the last half hour is to suggest changes. Again, I think there has been consensus and agreement on some of those changes and others not. I'm comfortable with where we are right now, and I think we're following the established procedure that has been pursued by this committee in recent years.

I would like to inform the opposition members that I have in my possession the recommendations that I'd like to move this afternoon, if we could get to that point and we could vote on those. I think it's established procedure that we would do that and certainly we're interested in receiving the opposition parties' dissenting reports. I don't think there's ever been a tradition that the length or the format of those dissenting reports would be in any way prohibited. I look forward to reading the dissenting opinions and I'm sure that if you want to make them 30 pages long that's fine with all of us over here.

Mr Galt: Provided they pay by the page.

The Chair: Do you think we can proceed and try to finish the initial report?

Mr Arnott: I think there's a chance, and I have the recommendations that our caucus wants to put forward for the committee's consideration, which I can table with the clerk at this time, and then proceed to make motions on each one of the recommendations individually, if that's OK with you, Mr Chairman.

The Chair: What you're suggesting, Mr Arnott, is-let's say if we take the subject on the table at this point in time, post-secondary education-that you want to go back to a recommendation-

Mr Arnott: I have said as much as I need to say today to try and influence changes in the report's body. Right now, I've signalled my intent to move a motion to adopt these recommendations and would then, in turn, make a motion that these recommendations be considered by the committee and be included in the final report.

The Chair: OK. Before we go there, the researchers would like to bring a couple of issues to your attention.

Ms Campbell: If we're finished with the post-secondary section, I was wondering if I could direct your attention to the paragraph under the heading "Universities." The last sentence reads: "The two research-related government-commissioned reports ... ." I was wondering if the committee would mind removing the word "the" from the beginning of the sentence and having it read, "Two research-related government-commissioned reports ... were commended to the government for consideration."

Mr Arnott: Agreed.

Ms Campbell: Then the paragraph under "Health," the first one at the bottom of page 11, the sentence reads, "Issues relating to health care generated many comments and recommendations from hospitals, nurses and those in the extended health system ... ." Perhaps the inclusion of the word "care" after "health" would make it read a bit better.

Mr Arnott: Yes.

Ms Campbell: On page 12, the second paragraph under the subheading "Physicians," the final sentence there reads, "Consideration should also be given to implementing incentive programs with varied payment schedules recommended by Dr Robert McKendry in his recent report ... ." I think that is a case of two thoughts being merged into one and it would maybe be more appropriate to read, "Consideration should also given to implementing incentive programs with varied payment schedules and to recommendations made by Dr Robert McKendry in his recent report ... ."

Mr Arnott: Fine. Agreed.

Ms Campbell: Thank you.

Mr Arnott: Mr Chairman, I would therefore make a motion that the following recommendations be included-

Mr Christopherson: Sorry. That's all the changes to the document?

Mr Arnott: -in the committee on finance and economic affairs pre-budget report:

(1) That the government should maintain its policies of strong fiscal management and continue to reduce the deficit and balance the budget by the fiscal year 2000-01.

(2) The government does not need a balanced budget to continually search for efficiencies in government. The government should be ever-vigilant to ensure that taxpayers' dollars are spent wisely.

(3) Tax cuts are an important economic stimulus. The government should fulfill its commitment to further reduce personal income taxes, stimulate job creation, investment and consumer confidence.

(4) The government should continue its commitment to reducing red tape and eliminating barriers to doing business through the work of the Red Tape Commission and other initiatives.

(5) The government should commit to a strategy to reduce the debt once the provincial deficit has been eliminated.

(6) The best social program for those living in poverty is a job. The government should continue to promote policies that create a climate conducive to strong private sector job creation and solid economic growth.

(7) The government should continue programs that promote economic development throughout the province of Ontario, particularly in communities which have yet to achieve their full economic potential.

(8) The government should continue to support policies that assist small- and medium-sized businesses to build equity.

(9) The government should continue working towards province-wide tax fairness within the property tax system.

(10) In the interest of assisting youth employment and their employers, the government should continue to call upon the federal government to reduce job-killing employment insurance premiums to $2 or less per $100 earned.

(11) The government should work with other levels of government and the private sector, including small business, to encourage youth employment.

(12) The government should continue to call upon the federal government to restore their commitment to health care and post-secondary education by returning the Canada health and social transfer funding to 1994-95 levels, and by including a new CHST escalator clause which would take into account Ontario's growing and aging population.

(13) The government should maintain its commitment to health care funding and continue to maintain a health care system that invests in priority services.

(14) Our children are our future. The government should continue to support programs and initiatives that ensure our children grow up in a healthy, safe and supportive environment.

(15) The government should support post-secondary education programs aimed at student assistance, as well as those programs aimed at reducing the level of student debt.

(16) The government should continue to find ways to ensure that more of the education budget goes to the classroom.

(17) The government should honour its commitment to capital infrastructure in the province of Ontario with the innovative SuperBuild Corp.

Mr Christopherson: Are you going to move them as one?

The Chair: I think they should be moved one at-

Mr Christopherson: No, I was going to say as a group.

Mr Arnott: I move them as a group. Does somebody have a problem with that? I assume the motion is in order to do it that way.

The Chair: So you're moving them individually or as a group?

Mr Arnott: One motion.

The Chair: Any discussion?

Mr Galt: Unanimous approval?

Mr Christopherson: You might want to do a standing count on that.

Mr Phillips: I propose it should be a recorded vote.


The Chair: Recorded vote. All in favour?


Arnott, Galt, Molinari.

The Chair: Opposed?


Christopherson, Phillips.

The Chair: That carries.

I think we'll probably need a motion now to adopt the report as presented.

Mr Christopherson: Minus the recommendations or with the recommendations?

The Chair: With the recommendations. Then it will be presented back to the subcommittee for final approval or for presentation to the committee after.

Mr Phillips: I think the staff needs that-

The Chair: That's right. They need time to rewrite the report. So we'll need a motion to-

Mr Christopherson: If you vote with the recommendations in, you're going to get us offside. If you vote for all the work we did, we lose all the benefit of what we did this morning. If you do it in two stages, we can at least give some credibility to the work that we did this morning in trying to find things we can agree on.

Mr Galt: I'd like to extend a motion of appreciation to David Rampersad and Elaine Campbell for the work that they've put in to packaging this report. They almost arrived at a consensus for all parties. I appreciated their efforts.

The Chair: All those in favour? That's unanimously approved.

Mr Galt: We finally got a motion that everybody agrees on. It must be the first time in my life.

The Chair: I stand to be corrected, because I'm certainly not an expert in procedural matters, but I would say that we probably need a motion to approve the report with the recommendations as a whole.

Mr Arnott: We don't have that until we see the final report.

The Chair: No, but the amended report so that it can be rewritten and submitted to the subcommittee.

Mr Arnott: Unless you empower the subcommittee to make that decision. Could we do that?

The Chair: Yes, we can do that. What about a motion enabling the subcommittee to pass a motion to accept the report? How does that fly?

Mr Arnott: This is just a suggestion, Mr Chair. What we're saying is that it's worthwhile to see if we can come to an agreement to create some statement at the end of the summary of the presentations that, in the unanimous opinion of the subcommittee, this is a fair representation of what the committee heard. That would maybe come at the tail end of the main body of the report, or the beginning perhaps, before you get into the recommendations that have now been adopted by a majority of the committee and the dissenting reports. If we don't empower the subcommittee to do it, we're going to have to have another meeting of this committee to pass a motion that says, "We agree with the changes that the research staff made relative to what was discussed this morning."

Mr Christopherson: The downside of that is that it provides the government members with a sort of veto, if you will, over the deliberations of the subcommittee, because they can always say, "I'm going to take this back to the committee," so maybe building it back into the committee, and we all know it's in our schedules. If there's agreement, then the meeting will be over in 30 minutes; if not, then we'll have to tussle it out. You could ask that the work the researchers are doing on behalf of the committee and the report, as amended today, go to the subcommittee with one reference back for final approval by the standing committee.

The Chair: That's exactly what we're going to suggest. The changes have been minor in the report itself. So if it were to be referred to the subcommittee for approval after the report has been fianalized by the researchers, then the subcommittee could vote on it. How does that sound?

Mr Christopherson: I feel silly raising this point, but I think the government would want to reserve the right to have their final majority crack at it. The subcommittee is two to one, and you'll have the right to appeal a matter if that happens. We can always cancel a committee meeting if we don't need it, but if we build it in now and agree there's going to be one-

Mr Arnott: The trouble is, we don't have the power to establish a meeting beyond Thursday when the House isn't in session.

The Chair: We have the next four days scheduled for that.

Mr Arnott: How long is it going to take for the staff to make those changes?

Ms Campbell: I would think a day.

Mr Arnott: Could we come back tomorrow and look at it again?

Mr Christopherson: Could you make it Wednesday?

The Chair: It has to be Wednesday.

Mr Arnott: I'm amenable to that.

Ms Campbell: We could have it on Wednesday with the changes marked in the document.

The Chair: Are we agreeable to that? We would meet here at 10 o'clock Wednesday morning. OK.

Mr Christopherson: Did you take the vote on the recommendations? I don't know if we did a formal recorded vote.

The Chair: Yes. It was a recorded vote.

We'll adjourn till 10 o'clock on Wednesday morning.

The committee adjourned at 1446.

Committee Documents